[1] Bull and bear are related to which commercial activity?
A.
Banking
B.
Ecommerce
C.
International trade
D.
Stock market
Ans:
Stock market
Explanation :
Both the terms are related to stock market. Investors who take a bull approach purchase securities under the assumption that they can be sold later at a higher price. A "bear" is considered to be the opposite of a bull. Bear investors believe that the value of a specific security or an industry is likely to decline in the future
[2] The share broker who sells shares in the apprehension of falling prices of shares is called -
A.
Bull
B.
Dog
C.
Bear
D.
Stag
Ans:
Bear
Explanation :
A bear market is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Bear investors believe that the value of a specific security or an industry is likely to decline in the future. Bears attempt to profit from a decline in prices. Bears are generally pessimistic about the state of a given market.
[3] "Bad money will drive out good money from circulation." This is known as :
A.
Engle's Law
B.
Gresham's Law
C.
Say' Law
D.
Wagner's Law
Ans:
Gresham's Law
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." It is commonly stated as: "Bad money drives out good."
[4] If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should -
A.
lower cash reserve ratio
B.
raise discount rates
C.
sell government securities
D.
All of the above
Ans:
lower cash reserve ratio
Explanation :
When the Central Bank of a country intends to increase money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to hold a lesser proportion of their deposi ts in the form of deposits with the RBI. This increases the amount of Bank deposits and they will lend more as they have more amount as their reserve.
[5] On the administered price of which of the following articles no subsidy is given?
A.
DAP
B.
ATF
C.
LPG
D.
Kerosene oil
Ans:
ATF
Explanation :
In India, no subsidy is given to Aviation Turbine Fuel (ATF). Indian Oil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. Jet fuel is a colorless, combustible, straight-run petroleum distillate liquid. The highly punitive fiscal regime in India is the primary problem for the aviation sector. The cost of Aviation Turbine Fuel in India is almost 60% higher than international benchmarks. Combined with a high base price, fuel now represents 45-55% of a carrier's operating costs.
[6] Which among the following has the least possibility of globalization?
A.
selection of labour force
B.
location of capital works
C.
to manage resources for investment
D.
increase in infrastructure
Ans:
location of capital works
Explanation :
Globalization can affect the labor market by increasing capacity of developing countries to create new opportunities for work and production following the alleviation of price distortions with respect to both labor and capital. Globalization on business management is interconnection of international markets and managing businesses in a global industry. This includes management of resources for foreign investments whereby a company expands its business and invests in foreign countries. Globalization means inter-linkage among the countries of the globe. This can only happen when infrastructure is in proper shape. A well-developed infrastructure is an indispensable condition for faster globalization.
[7] What was the objective of Command Area Development Programme?
A.
To ensure that land is given to the tillers
B.
To ensure better utilization of irrigation potential
C.
To develop I he areas under the command of Army
D.
Poverty alleviation in selected areas
Ans:
To ensure better utilization of irrigation potential
Explanation :
The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture product ion from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
[8] Distribution of food rains operates under a two her system with the introduction of -
A.
Targetted Public Distribution System
B.
The Consumers Cooperatives
C.
The Cooperative Marketing Societies
D.
The Service Cooperatives
Ans:
Targetted Public Distribution System
Explanation :
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
[9] A favorable Balance of Trade of a country implies that -
A.
Imports are greater than Exports
B.
Exports are greater than Imports
C.
Both Imports and Exports are equal
D.
Rising Imports and Falling Exports
Ans:
Exports are greater than Imports
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Both the terms are related to stock market. Investors who take a bull approach purchase securities under the assumption that they can be sold later at a higher price. A "bear" is considered to be the opposite of a bull. Bear investors believe that the value of a specific security or an industry is likely to decline in the future
[2] The share broker who sells shares in the apprehension of falling prices of shares is called -
A.
Bull
B.
Dog
C.
Bear
D.
Stag
Ans:
Bear
Explanation :
A bear market is a market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Bear investors believe that the value of a specific security or an industry is likely to decline in the future. Bears attempt to profit from a decline in prices. Bears are generally pessimistic about the state of a given market.
[3] "Bad money will drive out good money from circulation." This is known as :
A.
Engle's Law
B.
Gresham's Law
C.
Say' Law
D.
Wagner's Law
Ans:
Gresham's Law
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." It is commonly stated as: "Bad money drives out good."
[4] If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should -
A.
lower cash reserve ratio
B.
raise discount rates
C.
sell government securities
D.
All of the above
Ans:
lower cash reserve ratio
Explanation :
When the Central Bank of a country intends to increase money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to hold a lesser proportion of their deposi ts in the form of deposits with the RBI. This increases the amount of Bank deposits and they will lend more as they have more amount as their reserve.
[5] On the administered price of which of the following articles no subsidy is given?
A.
DAP
B.
ATF
C.
LPG
D.
Kerosene oil
Ans:
ATF
Explanation :
In India, no subsidy is given to Aviation Turbine Fuel (ATF). Indian Oil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. Jet fuel is a colorless, combustible, straight-run petroleum distillate liquid. The highly punitive fiscal regime in India is the primary problem for the aviation sector. The cost of Aviation Turbine Fuel in India is almost 60% higher than international benchmarks. Combined with a high base price, fuel now represents 45-55% of a carrier's operating costs.
[6] Which among the following has the least possibility of globalization?
A.
selection of labour force
B.
location of capital works
C.
to manage resources for investment
D.
increase in infrastructure
Ans:
location of capital works
Explanation :
Globalization can affect the labor market by increasing capacity of developing countries to create new opportunities for work and production following the alleviation of price distortions with respect to both labor and capital. Globalization on business management is interconnection of international markets and managing businesses in a global industry. This includes management of resources for foreign investments whereby a company expands its business and invests in foreign countries. Globalization means inter-linkage among the countries of the globe. This can only happen when infrastructure is in proper shape. A well-developed infrastructure is an indispensable condition for faster globalization.
[7] What was the objective of Command Area Development Programme?
A.
To ensure that land is given to the tillers
B.
To ensure better utilization of irrigation potential
C.
To develop I he areas under the command of Army
D.
Poverty alleviation in selected areas
Ans:
To ensure better utilization of irrigation potential
Explanation :
The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture product ion from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
[8] Distribution of food rains operates under a two her system with the introduction of -
A.
Targetted Public Distribution System
B.
The Consumers Cooperatives
C.
The Cooperative Marketing Societies
D.
The Service Cooperatives
Ans:
Targetted Public Distribution System
Explanation :
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
[9] A favorable Balance of Trade of a country implies that -
A.
Imports are greater than Exports
B.
Exports are greater than Imports
C.
Both Imports and Exports are equal
D.
Rising Imports and Falling Exports
Ans:
Exports are greater than Imports
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
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." It is commonly stated as: "Bad money drives out good."
[4] If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should -
A.
lower cash reserve ratio
B.
raise discount rates
C.
sell government securities
D.
All of the above
Ans:
lower cash reserve ratio
Explanation :
When the Central Bank of a country intends to increase money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to hold a lesser proportion of their deposi ts in the form of deposits with the RBI. This increases the amount of Bank deposits and they will lend more as they have more amount as their reserve.
[5] On the administered price of which of the following articles no subsidy is given?
A.
DAP
B.
ATF
C.
LPG
D.
Kerosene oil
Ans:
ATF
Explanation :
In India, no subsidy is given to Aviation Turbine Fuel (ATF). Indian Oil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. Jet fuel is a colorless, combustible, straight-run petroleum distillate liquid. The highly punitive fiscal regime in India is the primary problem for the aviation sector. The cost of Aviation Turbine Fuel in India is almost 60% higher than international benchmarks. Combined with a high base price, fuel now represents 45-55% of a carrier's operating costs.
[6] Which among the following has the least possibility of globalization?
A.
selection of labour force
B.
location of capital works
C.
to manage resources for investment
D.
increase in infrastructure
Ans:
location of capital works
Explanation :
Globalization can affect the labor market by increasing capacity of developing countries to create new opportunities for work and production following the alleviation of price distortions with respect to both labor and capital. Globalization on business management is interconnection of international markets and managing businesses in a global industry. This includes management of resources for foreign investments whereby a company expands its business and invests in foreign countries. Globalization means inter-linkage among the countries of the globe. This can only happen when infrastructure is in proper shape. A well-developed infrastructure is an indispensable condition for faster globalization.
[7] What was the objective of Command Area Development Programme?
A.
To ensure that land is given to the tillers
B.
To ensure better utilization of irrigation potential
C.
To develop I he areas under the command of Army
D.
Poverty alleviation in selected areas
Ans:
To ensure better utilization of irrigation potential
Explanation :
The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture product ion from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
[8] Distribution of food rains operates under a two her system with the introduction of -
A.
Targetted Public Distribution System
B.
The Consumers Cooperatives
C.
The Cooperative Marketing Societies
D.
The Service Cooperatives
Ans:
Targetted Public Distribution System
Explanation :
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
[9] A favorable Balance of Trade of a country implies that -
A.
Imports are greater than Exports
B.
Exports are greater than Imports
C.
Both Imports and Exports are equal
D.
Rising Imports and Falling Exports
Ans:
Exports are greater than Imports
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
In India, no subsidy is given to Aviation Turbine Fuel (ATF). Indian Oil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. Jet fuel is a colorless, combustible, straight-run petroleum distillate liquid. The highly punitive fiscal regime in India is the primary problem for the aviation sector. The cost of Aviation Turbine Fuel in India is almost 60% higher than international benchmarks. Combined with a high base price, fuel now represents 45-55% of a carrier's operating costs.
[6] Which among the following has the least possibility of globalization?
A.
selection of labour force
B.
location of capital works
C.
to manage resources for investment
D.
increase in infrastructure
Ans:
location of capital works
Explanation :
Globalization can affect the labor market by increasing capacity of developing countries to create new opportunities for work and production following the alleviation of price distortions with respect to both labor and capital. Globalization on business management is interconnection of international markets and managing businesses in a global industry. This includes management of resources for foreign investments whereby a company expands its business and invests in foreign countries. Globalization means inter-linkage among the countries of the globe. This can only happen when infrastructure is in proper shape. A well-developed infrastructure is an indispensable condition for faster globalization.
[7] What was the objective of Command Area Development Programme?
A.
To ensure that land is given to the tillers
B.
To ensure better utilization of irrigation potential
C.
To develop I he areas under the command of Army
D.
Poverty alleviation in selected areas
Ans:
To ensure better utilization of irrigation potential
Explanation :
The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture product ion from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
[8] Distribution of food rains operates under a two her system with the introduction of -
A.
Targetted Public Distribution System
B.
The Consumers Cooperatives
C.
The Cooperative Marketing Societies
D.
The Service Cooperatives
Ans:
Targetted Public Distribution System
Explanation :
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
[9] A favorable Balance of Trade of a country implies that -
A.
Imports are greater than Exports
B.
Exports are greater than Imports
C.
Both Imports and Exports are equal
D.
Rising Imports and Falling Exports
Ans:
Exports are greater than Imports
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
The Command Area Development Programme was launched in the year 1974-75 under Centrally Sponsored Scheme, with the objective of fast utilization of created irrigation potential and optimum agriculture product ion from irrigable land. It aimed at: reclamation of water logged areas; construction of field irrigation channels; construction of field drains; all round development of areas pertaining to agriculture, etc.
[8] Distribution of food rains operates under a two her system with the introduction of -
A.
Targetted Public Distribution System
B.
The Consumers Cooperatives
C.
The Cooperative Marketing Societies
D.
The Service Cooperatives
Ans:
Targetted Public Distribution System
Explanation :
The Targeted Public Distribution System (TPDS) replaced the erstwhile PDS from June 1997. Under the new system a two tier subsidized pricing system was introduced to benefit the poor.
[9] A favorable Balance of Trade of a country implies that -
A.
Imports are greater than Exports
B.
Exports are greater than Imports
C.
Both Imports and Exports are equal
D.
Rising Imports and Falling Exports
Ans:
Exports are greater than Imports
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Favorable balance of trade is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a balance of trade surplus. It's considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.
[10] 'Quota' is -
A.
tax levied on imports
B.
imports of capital goods
C.
limit on the quantity of imports
D.
limit on the quantity of exports
Ans:
limit on the quantity of imports
Explanation :
An import quota is a limit on the quantity of a good that can be produced abroad and sold domestically. It is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can he imported into a country in a given period of time. The primary goal of import quotas is to reduce imports and increase domestic production of a good, service, or activity, thus "protect" domestic production by restricting foreign competition.
[11] A tax is characterized by horizontal equity if its liability is -
A.
proportional to the income of tax payers
B.
similar for tax payers in similar circumstances
C.
proportional to the expenditure of tax payers
D.
the same for every tax payer
Ans:
proportional to the income of tax payers
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
The principle of equity includes both horizontal and vertical. Equity is determined by first assessing an individual's ability-to-pay. The idea of the ability-to-pay principle considers whether or not it is fair to tax someone higher just because that person has the ability and resources to pay. If it is decided that they should be required to pay more, the question of how much more arises. These questions can be analyzed through horizontal and vertical equity which are subsets of the ability-to-pay principle. Horizontal equity suggests it is fair for people of equal ability to pay the same amount in taxes.
[12] What does a Leasing Company provide?
A.
Machinery and capital equipment on hire
B.
Legal guidance in establishing an enterprise
C.
Office accommodation on hire
D.
Technical consultancy and experts for a fee
Ans:
Machinery and capital equipment on hire
Explanation :
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time.
[13] The government set up a committee headed by the Chairman, Central Board of Direct Taxes some time back to go into -
A.
codification of tax laws
B.
the entire structure of tax laws including the question of imposition of bank tax
C.
the concerns of the foreign investors in India with regard to taxation matters
D.
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Ans:
aspects of generation of black money, its transfer abroad and bringing back such money into India's legitimate financial system
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
The Central Board of Direct Taxes (CBDT) panel on black money recently suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace. In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.
[14] What is dual pricing?
A.
Wholesale price and Retail pricing
B.
Pricing by agents and Pricing by retailers
C.
Price fixed by Government and Price in open market
D.
Daily prices and Weekly prices
Ans:
Price fixed by Government and Price in open market
Explanation :
Dual pricing is the practice of setting prices at different levels depending on the currency used to make the purchase. It may be used to accomplish a variety of goals, such as to gain entry into a foreign market by offering unusually low prices to buyers - using the foreign currency, or as a method of price discrimination. In the context of commerce, however, dual pricing refers to the sale of the same product at different prices, depending on the market. This is also known as two-tier pricing and is common in many developing nations
[15] A tax is said to be regressive when its burden falls -
A.
less heavily on the poor than on the rich
B.
more heavily on the poor than on the rich
C.
equally on the poor as on the rich
D.
None of these
Ans:
more heavily on the poor than on the rich
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
In terms of individual income and wealth, a regressive tax imposes a greater burden on the poor than on the rich. There is an inverse relationship between the tax rate and the taxpayer's ability to pay, as measured by assets, consumption, or income. These taxes tend to reduce the tax burden of the well-to- do, as they shift the burden disproportionately to the needy.
[16] Mixed Economy means :
A.
Promoting both agriculture and industries in the economy
B.
Co-existence of public and private sectors
C.
Co-existence of rich and poor
D.
Co-existence of small and large industries
Ans:
Co-existence of public and private sectors
Explanation :
A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism. All modern economies are mixed where the means of production are shared between the private and public sectors.
[17] When aggregate supply exceeds aggregate demand -
A.
unemployment falls
B.
prices rise
C.
inventories accumulate
D.
unemployment develops
Ans:
inventories accumulate
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Deflation sets in when aggregate supply exceeds aggregate demand. Recession sets in. This will lead to a buildup in stocks (inventories) and this sends a signal to producers either to cut prices (to stimulate an increase in demand) or to reduce output so as to reduce the buildup of excess stocks. Either way -there is a tendency for output to move closer to the current level of demand.
[18] Investment is equal to -
A.
gross total of all types of physical capital assets
B.
gross total of all capital assets minus wear and tear
C.
stock of plants, machines and equipments
D.
None of these
Ans:
gross total of all capital assets minus wear and tear
Explanation :
Investment" is a broader concept that includes investment in all kinds of capital assets, whether physical property or financial assets. In economic statistics and accounts, capital formation can be valued gross, i.e., before deduction of consumption of fixed capital (or "depreciation"), or net, i.e. after deduction of "depreciation" write-offs. The net valuation method views "depreciation" as the compensation for the cost of replacing fixed equipment used up or worn out, which must be deducted from the total investment volume to obtain a measure of the "real" value of investments: the depreciation write-off compensates and cancels out the loss in capital value of assets used due to wear & tear, obsolescence, etc.
[19] Which one of the following items is included in the national income account?
A.
Services of housewives
B.
Income of smugglers
C.
Services of Sadhus
D.
Services of night-watchmen
Ans:
Services of night-watchmen
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
National income is the total value a country's final output of all new goods and services produced in one year. Services provided by housewives, income of smugglers and services of sadhus can be categorized as non-economic services and thus cannot be accounted.
[20] An Increase in national income because of an increase in price is called-
A.
an increase in national income in real terms
B.
an increase in national income at constant prices
C.
an increase in money national income
D.
an increase in national income at base year prices
Ans:
an increase in national income at base year prices
Explanation :
To find the real value of changes in output under inflationary conditions, the effects of any general price increase (price inflation) must be taken into account. This is done by holding prices constant from a starting measure, called the base year. It holds prices constant in terms of the prices existing in the base year.
[21] A ‘Transfer Income' is an -
A.
Income which is not produced by any production process
B.
Income taken away from one person and given over to another
C.
Unearned income
D.
Earned income
Ans:
Income which is not produced by any production process
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Income which is not produced by any production process is called Transfer Income.
[22] National Income is also called as :
A.
GNP at Factor Cost
B.
GNP at Market Price
C.
NNP at Factor Cost
D.
NNP at Market Price
Ans:
GNP at Factor Cost
Explanation :
National Income is the total value of all goods and services produced in the economy during a particular period of time.
[23] One of the following is 'Labour' in Economics.
A.
A Musician performing for a benefit fund
B.
A Painter working for his own pleasure
C.
Reading a book as a hobby
D.
A Mother teaching her own son
Ans:
A Musician performing for a benefit fund
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Labour includes both physical and mental work undertaken for some monetary reward. In this way, workers working in factories, services of doctors, advocates, ministers, officers and teachers are all included in labour. Any physical or mental work which is not undertaken for getting income, but simply to attain pleasure or happiness, is not labour.
[24] Excise duty is levied on -
A.
sale of goods
B.
production of goods
C.
import of goods
D.
export of goods
Ans:
production of goods
Explanation :
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty.
[25] Average Revenue means -
A.
the revenue per unit of commodity sold
B.
the revenue from all commodities sold
C.
the profit realised from the marginal unit sold
D.
the profit realised by sale of all commodities
Ans:
the revenue per unit of commodity sold
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Explanation :
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = TR/Q AR. In other words, it means price. Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from seller's point of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.