[1] Regulated markets aim at the development of the marketing structure to -
A.
widen the price spread between the producer and the consumer
B.
narrow down the price spread between the producer and the consumer
C.
increase the non-functional margins of the traders
D.
maximize the non-functional margins of the commission agents
Ans:
narrow down the price spread between the producer and the consumer
Explanation :
Regulated markets aim at the development of marketing structures to ensure remunerative prices to the producers and to narrow down the price spread between the producer and the consumer. It also aims at reducing the non-functional margins of the commission agents.
[2] Evaluating all the options to find out most suitable solution to business problems is inter- displinary activities. It is called -
A.
Professional research
B.
Management research
C.
Operational research
D.
Commercial research
Ans:
Operational research
Explanation :
Operational research is a discipline that deals with the application of advanced analytical methods to help make better decisions. Employing techniques from other mathematical sciences, such as mathematical modeling, statistical analysis, and mathematical optimization, operations research arrives at optimal or near-optimal solutions to complex decision-making problems. In a nutshell, operations research (O.R.) is the discipline of applying advanced analytical methods to help make better decisions.
[3] Variation in Cash Reserve Ratio and Open Market Operations are instruments of -
A.
Budgetary policy
B.
Trade policy
C.
Fiscal policy
D.
Monetary policy
Ans:
Monetary policy
Explanation :
Bank Rate Policy, open market operations and variation of Cash Reserve Ratios, etc. are instruments of monetary policy. With the help of these instruments, the Reserve Bank of India controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.
[4] The purpose of devaluation is to :
A.
be little foreign currencies
B.
encourage exports
C.
discourage exports
D.
encourage import
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. It makes exports more competitive and imports more expensive.
[5] Foreign currency which has a tendency of quick migration is called -
A.
Scarce currency
B.
Soft currency
C.
Gold currency
D.
Hot currency
Ans:
Hot currency
Explanation :
Hot money or currency is a term that is most commonly used in financial markets to refer to the now of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.
[6] Bank Rate refers to the interest rate at which -
A.
Commercial banks receive deposits from the public
B.
Central bank gives loans to Commercial banks
C.
Government loans are floated
D.
Commercial banks grant loans to their customers
Ans:
Central bank gives loans to Commercial banks
Explanation :
Bank rate is the interest rate at which a nation's central bank lends money to domestic banks. Often these loans are very short in duration.
[7] A Trade Policy consists of -
A.
Export-Import Policy
B.
Licencing Policy
C.
Foreign Exchange Policy
D.
Balance of Payment Policy
Ans:
Export-Import Policy
Explanation :
Trade policy, also called Export-Import policy, is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy.
[8] Globalisation means -
A.
Integration of economy
B.
Integration of financial market
C.
Integration of the domestic economy with the world economy
D.
Integration of the various sectors of economy
Ans:
Integration of the domestic economy with the world economy
Explanation :
Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources.
[9] The 'sunrise industries' imply -
A.
petrochemicals and electronics industry
B.
sunflower oil industry
C.
computer industry
D.
chemical industry
Ans:
petrochemicals and electronics industry
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Regulated markets aim at the development of marketing structures to ensure remunerative prices to the producers and to narrow down the price spread between the producer and the consumer. It also aims at reducing the non-functional margins of the commission agents.
[2] Evaluating all the options to find out most suitable solution to business problems is inter- displinary activities. It is called -
A.
Professional research
B.
Management research
C.
Operational research
D.
Commercial research
Ans:
Operational research
Explanation :
Operational research is a discipline that deals with the application of advanced analytical methods to help make better decisions. Employing techniques from other mathematical sciences, such as mathematical modeling, statistical analysis, and mathematical optimization, operations research arrives at optimal or near-optimal solutions to complex decision-making problems. In a nutshell, operations research (O.R.) is the discipline of applying advanced analytical methods to help make better decisions.
[3] Variation in Cash Reserve Ratio and Open Market Operations are instruments of -
A.
Budgetary policy
B.
Trade policy
C.
Fiscal policy
D.
Monetary policy
Ans:
Monetary policy
Explanation :
Bank Rate Policy, open market operations and variation of Cash Reserve Ratios, etc. are instruments of monetary policy. With the help of these instruments, the Reserve Bank of India controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.
[4] The purpose of devaluation is to :
A.
be little foreign currencies
B.
encourage exports
C.
discourage exports
D.
encourage import
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. It makes exports more competitive and imports more expensive.
[5] Foreign currency which has a tendency of quick migration is called -
A.
Scarce currency
B.
Soft currency
C.
Gold currency
D.
Hot currency
Ans:
Hot currency
Explanation :
Hot money or currency is a term that is most commonly used in financial markets to refer to the now of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.
[6] Bank Rate refers to the interest rate at which -
A.
Commercial banks receive deposits from the public
B.
Central bank gives loans to Commercial banks
C.
Government loans are floated
D.
Commercial banks grant loans to their customers
Ans:
Central bank gives loans to Commercial banks
Explanation :
Bank rate is the interest rate at which a nation's central bank lends money to domestic banks. Often these loans are very short in duration.
[7] A Trade Policy consists of -
A.
Export-Import Policy
B.
Licencing Policy
C.
Foreign Exchange Policy
D.
Balance of Payment Policy
Ans:
Export-Import Policy
Explanation :
Trade policy, also called Export-Import policy, is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy.
[8] Globalisation means -
A.
Integration of economy
B.
Integration of financial market
C.
Integration of the domestic economy with the world economy
D.
Integration of the various sectors of economy
Ans:
Integration of the domestic economy with the world economy
Explanation :
Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources.
[9] The 'sunrise industries' imply -
A.
petrochemicals and electronics industry
B.
sunflower oil industry
C.
computer industry
D.
chemical industry
Ans:
petrochemicals and electronics industry
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Bank Rate Policy, open market operations and variation of Cash Reserve Ratios, etc. are instruments of monetary policy. With the help of these instruments, the Reserve Bank of India controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.
[4] The purpose of devaluation is to :
A.
be little foreign currencies
B.
encourage exports
C.
discourage exports
D.
encourage import
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. It makes exports more competitive and imports more expensive.
[5] Foreign currency which has a tendency of quick migration is called -
A.
Scarce currency
B.
Soft currency
C.
Gold currency
D.
Hot currency
Ans:
Hot currency
Explanation :
Hot money or currency is a term that is most commonly used in financial markets to refer to the now of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.
[6] Bank Rate refers to the interest rate at which -
A.
Commercial banks receive deposits from the public
B.
Central bank gives loans to Commercial banks
C.
Government loans are floated
D.
Commercial banks grant loans to their customers
Ans:
Central bank gives loans to Commercial banks
Explanation :
Bank rate is the interest rate at which a nation's central bank lends money to domestic banks. Often these loans are very short in duration.
[7] A Trade Policy consists of -
A.
Export-Import Policy
B.
Licencing Policy
C.
Foreign Exchange Policy
D.
Balance of Payment Policy
Ans:
Export-Import Policy
Explanation :
Trade policy, also called Export-Import policy, is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy.
[8] Globalisation means -
A.
Integration of economy
B.
Integration of financial market
C.
Integration of the domestic economy with the world economy
D.
Integration of the various sectors of economy
Ans:
Integration of the domestic economy with the world economy
Explanation :
Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources.
[9] The 'sunrise industries' imply -
A.
petrochemicals and electronics industry
B.
sunflower oil industry
C.
computer industry
D.
chemical industry
Ans:
petrochemicals and electronics industry
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Hot money or currency is a term that is most commonly used in financial markets to refer to the now of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts. These speculative capital flows are called "hot money" because they can move very quickly in and out of markets, potentially leading to market instability.
[6] Bank Rate refers to the interest rate at which -
A.
Commercial banks receive deposits from the public
B.
Central bank gives loans to Commercial banks
C.
Government loans are floated
D.
Commercial banks grant loans to their customers
Ans:
Central bank gives loans to Commercial banks
Explanation :
Bank rate is the interest rate at which a nation's central bank lends money to domestic banks. Often these loans are very short in duration.
[7] A Trade Policy consists of -
A.
Export-Import Policy
B.
Licencing Policy
C.
Foreign Exchange Policy
D.
Balance of Payment Policy
Ans:
Export-Import Policy
Explanation :
Trade policy, also called Export-Import policy, is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy.
[8] Globalisation means -
A.
Integration of economy
B.
Integration of financial market
C.
Integration of the domestic economy with the world economy
D.
Integration of the various sectors of economy
Ans:
Integration of the domestic economy with the world economy
Explanation :
Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources.
[9] The 'sunrise industries' imply -
A.
petrochemicals and electronics industry
B.
sunflower oil industry
C.
computer industry
D.
chemical industry
Ans:
petrochemicals and electronics industry
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Trade policy, also called Export-Import policy, is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. Things like import and export taxes, tariffs, inspection regulations, and quotas can all be part of a nation's trade policy.
[8] Globalisation means -
A.
Integration of economy
B.
Integration of financial market
C.
Integration of the domestic economy with the world economy
D.
Integration of the various sectors of economy
Ans:
Integration of the domestic economy with the world economy
Explanation :
Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources.
[9] The 'sunrise industries' imply -
A.
petrochemicals and electronics industry
B.
sunflower oil industry
C.
computer industry
D.
chemical industry
Ans:
petrochemicals and electronics industry
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Sunrise Industry is a colloquial term for a sector or business that is in its infancy, but is growing at a rapid pace. A sunrise industry is typically characterized by high growth rates, numerous startups and an abundance of venture capital funding. A sunrise industry is often characterized by a high degree of innovation.
[10] Regional Rural Banks arc sponsored by -
A.
Nationalized Commercial Bank
B.
Reserve Bank of India
C.
State Bank of India
D.
Government of India
Ans:
Nationalized Commercial Bank
Explanation :
The Narasimham committee conceptualized the foundation of regional rural banks in India. Five regional rural banks were set up on October 2, 1975. There were five commercial banks, viz. Punjab National Bank, State Bank of India, Syndicate Bank. United Bank of India and United Commercial Bank, which sponsored the regional rural banks.
[11] Scheduled Banks have to be registered with -
A.
SEBI
B.
RBI
C.
Finance Ministry
D.
SBI
Ans:
RBI
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
The scheduled primary (urban) cooperative banks are required to maintain with the Reserve Bank of India an average daily balance, the amount of which should not be less than 5 per cent of their net demand and time liabilities in India in terms of Section 42 of the Reserve Bank of India Act, 1934. Non- scheduled (urban) cooperative banks, under the provision of Section 18 of Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on clay-to-day basis.
[12] Which organization collects data for the unorganized sector?
A.
NSSO
B.
CSO
C.
ASI
D.
RBI
Ans:
NSSO
Explanation :
The National Sample Survey Office (NSSO) in India is a unique setup to carry out surveys on socio- economic, demographic, agricultural and industrial subjects for collecting data from households and from enterprises located in villages and in the towns. The unregistered manufacturing sub-sector, a complement set to the registered manufacturing sub-sector, covers all the residual units which are not covered under the registered manufacturing sector.
[13] National Income include :
A.
Financial help to earthquake victims
B.
Pocket money of a child
C.
Winning of a lottery prize
D.
Construction of a new house
Ans:
Construction of a new house
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
National income is the total value a country’s final output of all new goods and services produced in one year. So construction of a new house is certainly output of goods. Transfer payments are not a part of the national income. So private sector transfers including charitable donations and prizes to lottery winners are excluded from it.
[14] Value of out put and value added can be distinguished if we know:
A.
the value of intermediate consumption
B.
the value of net indirect taxes
C.
the value of the sales
D.
the value of consumption of fixed capital
Ans:
the value of intermediate consumption
Explanation :
Intermediate consumption is an accounting flow which consists of the total monetary value of goods and services consumed or used up as inputs in production by enterprises, including raw materials, services and various other operating expenses. Intermediate consumption (unlike fixed assets) is not normally classified in national accounts by type of good or service, because the accounts will show net output by sector of activity. Because this value must be subtracted from Gross Output to arrive at GDP, how it is exactly defined and estimated will importantly affect the size of the GDP estimate.
[15] Who prepared the first estimate of National Income for the country?
A.
Central Statistical Organisation
B.
National Income Committee
C.
Dadabhai Naoroji
D.
National Sample Survey Organisation
Ans:
Dadabhai Naoroji
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Dadabhai Naoroji prepared the first estimates of National income in 1876. He estimated the national income by first estimating the value of agricultural production and then adding a certain percentage as nonagricultural production. However, such method can only been called as a non-scientific method.
[16] 'Supply creates its own demand'. This statement is related to -
A.
Prof. J.B. Say
B.
John Robinson
C.
Adam Smith
D.
J.S. Mill
Ans:
Prof. J.B. Say
Explanation :
Jean Baptiste Say was a French economist. He is well known for Say’s Law (or Say’s Law of Markets), often summarized as: “Aggregate supply creates its own aggregate demand”; “Supply creates its own demand”, or “Supply constitutes its own demand”. He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand.
[17] Sectoral distribution of GDP index measures .
A.
Agriculture development of a country
B.
Economic development of a country
C.
Social development of a country
D.
Socio-Economic development of a Country
Ans:
Economic development of a country
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
The sectoral distribution of GDP index measures the development of a country across several economic activities. It the market value of all final goods and services produced in a period (quarterly or yearly).
[18] Which among the following statements is not true when there is an increase in interest rate in an economy?
A.
increase in saving
B.
decrease in loan
C.
increase in production cost
D.
increase in capital return
Ans:
increase in capital return
Explanation :
Interest rate increases the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate environment, shares become a more attractive buy, raising households' financial assets. This may also contribute to higher consumer spending, and makes companies' investment projects more attractive. Lower interest rates also tend to cause currencies to depreciate: Demand for domestic goods rises when imported goods become more expensive. All of these factors raise output and employment as well as investment and consumer spending.
[19] The difference between the GNP and the NNP is equal to the -
A.
consumer expenditure on durable goods
B.
direct tax revenue
C.
indirect tax revenue
D.
capital depreciation
Ans:
capital depreciation
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are used (depreciation with (he matching principle). The difference between the GNP and NNP is equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
[20] By whom was the autonomous investment separated from induced investment?
A.
Schumpeter
B.
Malthus
C.
Joan Robinson
D.
Adam Smith
Ans:
Schumpeter
Explanation :
Under his concept of creative destruction, Schunipeter distinguished between two types of investment that he called induced and autonomous. Induced investment arose from the discrepancy between sup- ply and demand and autonomous investment from resources and technology created by the entrepreneurs. He also introduced a concept of "saving up" which is different from saving in the neoclassical growth models. Saving up constituted the part of out-put that is withheld from investment and consumption.
[21] When price of a substitute of commodity falls, the demand for -
A.
falls
B.
remains unchanged
C.
increases at increasing rate
D.
rises
Ans:
falls
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Cross Price Effect refers to effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity. When price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at its same price. It leads to a rightward shift in the demand curve of the given commodity. With decrease in price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards left.
[22] A mixed economy refers to an economic system where -
A.
The economy functions with foreign collaboration
B.
Only t he private sector operates under government control
C.
Both the government and the private sectors operate sectors operate simultaneously
D.
No foreign investment is allowed
Ans:
Both the government and the private sectors operate sectors operate simultaneously
Explanation :
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. The basic idea of the mixed economy is that the means of production are mainly under private ownership: that markets remain the dominant form of economic coordination: and that the government wields indirect influence over the economy through fiscal arid monetary policies.
[23] A Black Market is a situation where in -
A.
Goods are loaded by the producers
B.
Goods are sold secretly
C.
Goods are sold at prices higher than what is fixed by the Government
D.
Goods are made available
Ans:
Goods are sold secretly
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
Black market is the market in which illegal goods are traded. Goods acquired illegally take one of two price levels: (i) they may be cheaper than legal market prices as the supplier does not have to pay for production costs or taxes; or (ii) they may be more expensive than legal market prices as the product is difficult to acquire or produce, dangerous to handle or not easily available legally. Black-market transactions typically occur as a way for participants to avoid government price controls or taxes, conducting transactions 'under the table.' So the most defining feature of black markets is that they have to be carried out secretly as they are illegal.
[24] Buoyancy of a tax is defined as -
A.
percentage increase in tax revenue/percentage increase in tax base
B.
increase in tax revenue/ percentage increase in tax coverage
C.
increase in tax revenue/increase in tax base
D.
percentage increase in tax revenue/ increase in tax coverage
Ans:
increase in tax revenue/increase in tax base
Explanation :
Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax structure administered by the government. Tax buoyancy measures the total response of tax revenues to changes in national income. Total response takes into account both increases in income and discretionary changes (i.e., tax rates and bases) made by tax authorities in the system. The responsiveness of tax revenues to discretionary changes in the tax rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
[25] What is referred to as "Depository Services"?
A.
A new scheme of fixed deposits
B.
A method of regulating stock exchanges
C.
An agency for safe-keeping of securities
D.
An advisory service to investors
Ans:
An agency for safe-keeping of securities
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
Explanation :
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un- certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.