[1] The market equilibrium for a commodity is determined by :
A.
The market supply of the commodity.
B.
The balancing of the forces of demand and supply for the commodity
C.
The intervention of the Government.
D.
The market demand of the commodity.
Ans:
The balancing of the forces of demand and supply for the commodity
Explanation :
Market Equilibrium is determined when the quantity demanded of a commodity becomes equal to the quantity supplied. The price determined corresponding to market equilibrium is known as equilibrium price and the corresponding quantity is known as equilibrium quantity.
[2] Which of the following would not constitute an economic activity in Economics?
A.
A teacher teaching students in his college
B.
A teacher teaching students in a coaching institute
C.
A teacher teaching his own daughter at home
D.
A teacher teaching students under Sarva Shiksha Abbiyan Scheme
Ans:
A teacher teaching his own daughter at home
Explanation :
Economic activity, is quite simply, the activity of the economy. It includes the growth and shrinkage of the economy and all factors that affect this (for example Aggregate Expenditure). It is commonly measured by the GDP (Gross Domestic Product) which is probably one of the most reliable economic indicators. A teacher teaching his daughter at home is the example of a non-economic activity.
[3] Which one of the following is not included while estimating national income through income method?
A.
Rent
B.
Mixed incomes
C.
Pension
D.
Undistributed profits
Ans:
Pension
Explanation :
The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation. Transfer incomes are excluded from national income. Therefore, wages of labourers will be included, pensions of retired workers will be excluded from national income.
[4] Who defined investment as "the construction of a new capital asset like machinery or factory building"?
A.
Hansen
B.
J.M. Keynes
C.
Harrod
D.
J.R. Hicks
Ans:
J.M. Keynes
Explanation :
Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. According to Keynes investment demand depends upon two factors: (1) Expected rate of profit which he calls as Marginal Efficiency of Capital (MEC). Investment demand increases with the increase in the expected rate of profit; (2) the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.
[5] An individual's actual standard of living can be assessed by -
A.
Gross National Income
B.
Net National Income
C.
Per Capita Income
D.
Disposable Personal Income
Ans:
Per Capita Income
Explanation :
The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita. This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation's standard of living providing that output rises faster than the total population.
[6] The standard of living in a country is represented by its:
A.
poverty ratio
B.
per capita income
C.
national income
D.
unemployment rate
Ans:
per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a county or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population. It does not attempt to reflect the distribution of income or wealth. Per capita income is often used to measure a country's standard of living. However, it is not a good standard of measuring standard of living as it is in- come of one person of the country.
[7] Capital output ratio of a commodity measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output: hence the resulting capital output ratio is low. The capital output ratio tends to increase if the capital available in a country is cheaper than the other inputs. Therefore, the countries that are rich in natural resources have a low capital output ratio. This is because they can easily substitute the capital with natural resources in order to increase the output. When countries use their natural resources instead of capital then COR reduces.
[8] Taxes on professions can be levied by :
A.
State government only
B.
both by state and union government
C.
by panchayats only
D.
Union government only
Ans:
State government only
Explanation :
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
[9] A part of National Debt known as External Debt is the amount -
A.
borrowed by its citizens from abroad
B.
lent by its citizens to foreign governments
C.
borrowed by its government from abroad
D.
lent by its government to foreign government
Ans:
borrowed by its government from abroad
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Market Equilibrium is determined when the quantity demanded of a commodity becomes equal to the quantity supplied. The price determined corresponding to market equilibrium is known as equilibrium price and the corresponding quantity is known as equilibrium quantity.
[2] Which of the following would not constitute an economic activity in Economics?
A.
A teacher teaching students in his college
B.
A teacher teaching students in a coaching institute
C.
A teacher teaching his own daughter at home
D.
A teacher teaching students under Sarva Shiksha Abbiyan Scheme
Ans:
A teacher teaching his own daughter at home
Explanation :
Economic activity, is quite simply, the activity of the economy. It includes the growth and shrinkage of the economy and all factors that affect this (for example Aggregate Expenditure). It is commonly measured by the GDP (Gross Domestic Product) which is probably one of the most reliable economic indicators. A teacher teaching his daughter at home is the example of a non-economic activity.
[3] Which one of the following is not included while estimating national income through income method?
A.
Rent
B.
Mixed incomes
C.
Pension
D.
Undistributed profits
Ans:
Pension
Explanation :
The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation. Transfer incomes are excluded from national income. Therefore, wages of labourers will be included, pensions of retired workers will be excluded from national income.
[4] Who defined investment as "the construction of a new capital asset like machinery or factory building"?
A.
Hansen
B.
J.M. Keynes
C.
Harrod
D.
J.R. Hicks
Ans:
J.M. Keynes
Explanation :
Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. According to Keynes investment demand depends upon two factors: (1) Expected rate of profit which he calls as Marginal Efficiency of Capital (MEC). Investment demand increases with the increase in the expected rate of profit; (2) the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.
[5] An individual's actual standard of living can be assessed by -
A.
Gross National Income
B.
Net National Income
C.
Per Capita Income
D.
Disposable Personal Income
Ans:
Per Capita Income
Explanation :
The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita. This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation's standard of living providing that output rises faster than the total population.
[6] The standard of living in a country is represented by its:
A.
poverty ratio
B.
per capita income
C.
national income
D.
unemployment rate
Ans:
per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a county or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population. It does not attempt to reflect the distribution of income or wealth. Per capita income is often used to measure a country's standard of living. However, it is not a good standard of measuring standard of living as it is in- come of one person of the country.
[7] Capital output ratio of a commodity measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output: hence the resulting capital output ratio is low. The capital output ratio tends to increase if the capital available in a country is cheaper than the other inputs. Therefore, the countries that are rich in natural resources have a low capital output ratio. This is because they can easily substitute the capital with natural resources in order to increase the output. When countries use their natural resources instead of capital then COR reduces.
[8] Taxes on professions can be levied by :
A.
State government only
B.
both by state and union government
C.
by panchayats only
D.
Union government only
Ans:
State government only
Explanation :
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
[9] A part of National Debt known as External Debt is the amount -
A.
borrowed by its citizens from abroad
B.
lent by its citizens to foreign governments
C.
borrowed by its government from abroad
D.
lent by its government to foreign government
Ans:
borrowed by its government from abroad
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation. Transfer incomes are excluded from national income. Therefore, wages of labourers will be included, pensions of retired workers will be excluded from national income.
[4] Who defined investment as "the construction of a new capital asset like machinery or factory building"?
A.
Hansen
B.
J.M. Keynes
C.
Harrod
D.
J.R. Hicks
Ans:
J.M. Keynes
Explanation :
Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. According to Keynes investment demand depends upon two factors: (1) Expected rate of profit which he calls as Marginal Efficiency of Capital (MEC). Investment demand increases with the increase in the expected rate of profit; (2) the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.
[5] An individual's actual standard of living can be assessed by -
A.
Gross National Income
B.
Net National Income
C.
Per Capita Income
D.
Disposable Personal Income
Ans:
Per Capita Income
Explanation :
The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita. This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation's standard of living providing that output rises faster than the total population.
[6] The standard of living in a country is represented by its:
A.
poverty ratio
B.
per capita income
C.
national income
D.
unemployment rate
Ans:
per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a county or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population. It does not attempt to reflect the distribution of income or wealth. Per capita income is often used to measure a country's standard of living. However, it is not a good standard of measuring standard of living as it is in- come of one person of the country.
[7] Capital output ratio of a commodity measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output: hence the resulting capital output ratio is low. The capital output ratio tends to increase if the capital available in a country is cheaper than the other inputs. Therefore, the countries that are rich in natural resources have a low capital output ratio. This is because they can easily substitute the capital with natural resources in order to increase the output. When countries use their natural resources instead of capital then COR reduces.
[8] Taxes on professions can be levied by :
A.
State government only
B.
both by state and union government
C.
by panchayats only
D.
Union government only
Ans:
State government only
Explanation :
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
[9] A part of National Debt known as External Debt is the amount -
A.
borrowed by its citizens from abroad
B.
lent by its citizens to foreign governments
C.
borrowed by its government from abroad
D.
lent by its government to foreign government
Ans:
borrowed by its government from abroad
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
The standard of living is a measure of the material welfare of the inhabitants of a country. The baseline measure of the standard of living is real national output per head of population or real GDP per capita. This is the value of national output divided by the resident population. Other things being equal, a sustained increase in real GDP increases a nation's standard of living providing that output rises faster than the total population.
[6] The standard of living in a country is represented by its:
A.
poverty ratio
B.
per capita income
C.
national income
D.
unemployment rate
Ans:
per capita income
Explanation :
Per capita income or average income or income per person is the mean income within an economic aggregate, such as a county or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population. It does not attempt to reflect the distribution of income or wealth. Per capita income is often used to measure a country's standard of living. However, it is not a good standard of measuring standard of living as it is in- come of one person of the country.
[7] Capital output ratio of a commodity measures -
A.
its per unit cost of production
B.
the amount of capital invested per unit of output
C.
the ratio of capital depreciation to quantity of output
D.
the ratio of working capital employed to quantity of output
Ans:
the amount of capital invested per unit of output
Explanation :
Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output: hence the resulting capital output ratio is low. The capital output ratio tends to increase if the capital available in a country is cheaper than the other inputs. Therefore, the countries that are rich in natural resources have a low capital output ratio. This is because they can easily substitute the capital with natural resources in order to increase the output. When countries use their natural resources instead of capital then COR reduces.
[8] Taxes on professions can be levied by :
A.
State government only
B.
both by state and union government
C.
by panchayats only
D.
Union government only
Ans:
State government only
Explanation :
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
[9] A part of National Debt known as External Debt is the amount -
A.
borrowed by its citizens from abroad
B.
lent by its citizens to foreign governments
C.
borrowed by its government from abroad
D.
lent by its government to foreign government
Ans:
borrowed by its government from abroad
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Capital Output Ratio is the ratio of capital used to produce an output over a period of time. This ratio has a tendency to be high when capital is cheap as compared to other inputs. For instance, a country with abundant natural resources can use its resources in lieu of capital to boost its output: hence the resulting capital output ratio is low. The capital output ratio tends to increase if the capital available in a country is cheaper than the other inputs. Therefore, the countries that are rich in natural resources have a low capital output ratio. This is because they can easily substitute the capital with natural resources in order to increase the output. When countries use their natural resources instead of capital then COR reduces.
[8] Taxes on professions can be levied by :
A.
State government only
B.
both by state and union government
C.
by panchayats only
D.
Union government only
Ans:
State government only
Explanation :
In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.
[9] A part of National Debt known as External Debt is the amount -
A.
borrowed by its citizens from abroad
B.
lent by its citizens to foreign governments
C.
borrowed by its government from abroad
D.
lent by its government to foreign government
Ans:
borrowed by its government from abroad
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
[10] Which of the following is not considered as National Debt?
A.
National Savings Certificates
B.
Long-term Government Bonds
C.
Insurance Policies
D.
Provident Fund
Ans:
Insurance Policies
Explanation :
Government debt is the debt owed by a central government. Governments usually borrow by issuing securities, government bonds and bills. Government Bonds are often issued via auctions at Stock Exchanges. There are two main depository types: Book-Entry and Certificate. Insurance policies do not come under government debt. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay.
[11] Disinvestments is -
A.
offloading of shares of privates companies to government
B.
offloading of government shares to private companies
C.
increase in investment
D.
closing down of business concerns
Ans:
offloading of government shares to private companies
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Disinvestment is a process where Government sells its equity holding to private sectors. In other ways it is a privatization process where private parties are given shareholding in Government undertakings either wholly or partially.
[12] According to Keynesian theory of income determination, at full employment, a fall in aggregate demand causes -
A.
a fall in prices of output and resources
B.
a fall in real gross National product and employment
C.
a rise in real gross National product and investment
D.
a rise in prices of output and resources
Ans:
a fall in prices of output and resources
Explanation :
In 1936, John Maynard Keynes published the book "The General Theory of Employment, Interest and Money to explain the prolonged and massive unemployment in the Great Depression. The book criticises the classical model. Keynes turns Say's Law on its head, arguing that aggregate demand determines national output and employment in the economy. In this sense, demand creates its own supply. Unlike the Classical economists, Keynes believes that prices and wages are rigid, especially in the downward direction and hence the economy is not a self-correcting mechanism. In other words, Keynes believes that as prices and wages are rigid, the economy can stay at a below-full-employment equilibrium. Suppose that the economy is at the full-employment equilibrium.
[13] The theory of "Maximum Social Advantage" in Public Finance Was given by
A.
Robbins
B.
Musgrave
C.
Findley
D.
Dalten
Ans:
Dalten
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
The 'Principle of Maximum Social Advantage' was introduced by British economist Hugh Dalton. According to Dalton, "The best system of public finance is that which secures the maximum social advantage from the operations which it conducts."
[14] Taxes are as certain as the death, because -
A.
They constitute the major source of government revenue.
B.
Government have no other source of revenue.
C.
Most PSUs are run inefficiently.
D.
Government has its own budget constraints.
Ans:
They constitute the major source of government revenue.
Explanation :
Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied in economics means that the largest amount of revenue raised by governments comes from taxation. The proverb draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
[15] In the context of the stock market, IPO stands for -
A.
Immediate Payment Order
B.
Internal Policy Obligation
C.
Initial Public Offer
D.
International Payment Obligation
Ans:
Initial Public Offer
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time. Through this process, a private company transforms into a public company. Initial public offerings are used by - companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors.
[16] Disinvestment in Public Sector is called -
A.
Liberalisation
B.
Globalisation
C.
Industrialisation
D.
Privatisation
Ans:
Privatisation
Explanation :
Privatization is the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
[17] Which one of the following is NOT an example of indirect tax?
A.
Sales tax
B.
Excise duty
C.
Customs duty
D.
Expenditure tax
Ans:
Expenditure tax
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending. This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit for this type of tax scheme is the removal of double taxation.
[18] Interest on public debt is a part of :
A.
transfer payments by the enterprises
B.
transfer payments by the Govt.
C.
national income
D.
interest payments by households
Ans:
transfer payments by the Govt.
Explanation :
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
[19] A speculator who sells stocks, in order to buy back when price falls, for gain is a -
A.
Bull
B.
Bear
C.
Boar
D.
Bison
Ans:
Bear
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
A bear is a speculator who is wary of fall in prices and hence sells securities so that he may buy them at cheap price in future. He does not have securities at present but sells them at higher prices in anticipation that he will supply them business purchasing at lower prices in the future. If the prices move down as per the expectations of the bear he will earn profits out of these transactions.
[20] Inflation can be checked by -
A.
increasing exports
B.
increasing money supply
C.
increasing Government expenditure
D.
decreasing money supply
Ans:
decreasing money supply
Explanation :
The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, they will buy lesser quantity of goods and services and postpone luxurious expenses. This will reduce the demand for the products and thus lead to reduction in prices. Most central banks use high interest rates as the traditional way to fight or prevent inflation.
[21] "Legal Tender Money" refers to :
A.
Cheques
B.
Drafts
C.
Bill of exchange
D.
Currency notes
Ans:
Currency notes
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender money is a type of payment that is protected by law.
[22] Gresham's Law means -
A.
Good money replaces bad money in circulation
B.
Bad money replaces good money in circulation
C.
Good money promotes bad money in the system
D.
Bad money promotes good money in the system
Ans:
Bad money replaces good money in circulation
Explanation :
Gresham's law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the under-valued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
[23] Free Trade refers to -
A.
free movement of goods from one country to another
B.
movement of goods free of cost
C.
unrestricted exchange of goods and service
D.
trade free of duty
Ans:
free movement of goods from one country to another
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ-from those that would emerge under deregulation.
[24] Insider trading is related to -
A.
Trade sector
B.
Share market
C.
Credit market
D.
Horse racing
Ans:
Share market
Explanation :
Insider trading is the trading of a public company's stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
[25] Situation Analysis is useful for:
A.
Analysis of Capital Market
B.
SWOT Analysis
C.
Capital Market.
D.
Analysis of Capital Market and Capital Market.
Ans:
SWOT Analysis
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.
Explanation :
Three of the four options in the question are identical. Situation analysis refers to a collection of methods that managers use to analyze an organization's internal and external environment to understand the organization's capabilities, customers, and business environment. It is useful for Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.