NCFM Model Test Paper on Macroeconomics for Financial Markets

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htm
NCFM Model Test Paper

Macroeconomics for Financial Markets Module
Maximum Marks: 100 Test Duration: 120 minutes Pass Marks: 60 Time Left: 359:20 minutes
The Forward Markets Commission (FMC) regulates ______ markets. [ 2 Marks ]
(a) equity
Q1 (b) cash
(c) finance
(d) commodities
(e) I am not attempting the question
Governments raise resources mostly using ______. [ 1 Mark ]
(a) incentives
Q2 (b) coersion
(c) dictats
(d) taxes
_______ is a measure of the extent to which the creation of money in the banking system causes the growth in the
money supply to exceed growth in the monetary base. [ 2 Marks ]
(a) Cash multiplier

Q3 (b) Money multiplier
(c) Finance multiplier
(d) Income multiplier
The overall _______ for a country in a given year is the sum of the surplus/ deficits of current and capital accounts.
[ 2 Marks ]
(a) Balance on revenue account

Q4 (b) Balance on capital account
(c) Balance of Payments
(d) Balance of recurring account
"When interest rates go down, prices of fixed interest bonds ?" [ 2 Marks ]
(a) Remain unchanged

Q5 (b) Go down
(c) Go up
(d) I am not attempting the question
"Resources are scarce, while human wants are _______. " [ 1 Mark ]
Q6 (a) unlimited
(b) limited
(c) I am not attempting the question
A well functioning legal and a stable political system is essential for markets to operate efficiently. [ 1 Mark ]
Q7 (a) FALSE
(b) TRUE
"_______ directly adds to production capacity in the host country and, other things remaining the same, contributes
to capital formation and employment generation in the host country." [ 2 Marks ]
Q8
(a) Greenfield ECP
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(b) Greenfield FPI

(c) Greenfield ECB
(d) Greenfield FDI
The ________ is measured at regular intervals and changes in the index are an indicator of the average price
movement of a fixed basket of goods and services (that represent the entire economy). [ 1 Mark ]
(a) inflation index

Q9 (b) stock price index
(c) deflation index
(d) price index
Usages of commodities as the medium of exchange in the early days and measure of value correspond to what we
presently call ______. [ 1 Mark ]
(a) Cash'
Q10 (b) Exchange'
(c) ?Money?
(d) Coins'
Share capital is a source of funds for commercial banks. [ 1 Mark ]
Q11 (a) TRUE

(b) FALSE
_______ are instruments used by foreign investors not registered with the Indian regulators for taking an exposure in
the domestic market. [ 3 Marks ]
(a) International Notes (INs)

Q12 (b) Participatory notes (PNs)
(c) Credit Notes (CNs)
(d) Promissory Notes (PNs)
"__________ tells us about what determines level of output in an economy, how are employment and prices
determined; how money supply affects rate of interest" [ 2 Marks ]
Q13 (a) Macroeconomics

(b) Microeconomics
"The Reserve Bank of India was established on April 1, 1935 under the _______, which was passed in the year 1934. "
[ 1 Mark ]
(a) Reserve Bank of India Act

Q14 (b) Bank of India Act
(c) Finance Act
(d) Banking Regulator Act
Using GDP estimates at ______ prices helps us eliminate the effects of price level changes on the GDP. [ 1 Mark ]
(a) minimum
Q15 (b) fluctuating
(c) maximum
(d) constant
The wholesale price inflation is also called the ______ inflation [ 2 Marks ]
(a) advanced
Q16
(b) basic
(c) headline
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(d) timeline
"________ expenditure involves routine government expenditure, which does not create any asset for the
government. " [ 3 Marks ]
(a) Recurring
Q17 (b) Capital
(c) Depreciation
(d) Revenue
Commercial banks through their fractional reserve system also help create _____ in the economy. [ 2 Marks ]
(a) buffer
Q18 (b) money
(c) liquidity
(d) positivity
"When a country sells its domestically produced goods and services abroad, the country is said to be ______. " [ 1
Mark ]
Q19 (a) ?exporting?

(b) importing'
The issuer of Currency in India is the ________. [ 2 Marks ]
(a) IRDA
Q20 (b) SEBI
(c) FMC
(d) RBI
"Trade among developed countries could not be explained by absolute advantage. To explain this, David Ricardo
propounded the law of _______." [ 1 Mark ]
(a) recovarable advantage

Q21 (b) relative advantage
(c) theoritical advantage
(d) comparitive advantage
The essence of ________ is to explore ways to optimize the use of scare resources and to organize the society in a
way that leads to the most efficient use of those resources. [ 1 Mark ]
(a) Maths
Q22 (b) History
(c) Economics
(d) Geography
______ implies adjusted for inflation. [ 1 Mark ]
(a) """Positive"""
Q23 (b) """Unreal"""
(c) ?Real?
(d) """Negative"""
"While _______ price inflation is more popular in India, the Consumer Price Index is a popular measure in developed
nations like USA, UK. " [ 3 Marks ]
Q24 (a) food

(b) consumer
(c) market
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(d) wholesale
"While wheat becomes an ingredient for producing the bread, the oven is only a tool to produce it. Such goods are
called _____ Goods." [ 2 Marks ]
(a) Producing
Q25 (b) Revenue
(c) Production
(d) Capital
Every business enterprise involves _____. [ 1 Mark ]
(a) risk
Q26 (b) assured profits
(c) sure losses
(d) windfall gains
A paper currency note does not have any intrinsic value or value of its own. Such type of money is called ______. [
2 Marks ]
(a) """cash money"""

Q27 (b) """flat money"""
(c) ?fiat money?
(d) "real money"""
"There have however been exceptions, when there have been sustained decline in the price level of goods and
services. This phenomenon is called ______. " [ 1 Mark ]
(a) counter inflation

Q28 (b) inflation
(c) hyper-inflation
(d) deflation
Gift tax is an example of ______. [ 2 Marks ]
Q29 (a) Direct tax

(b) Indirect tax
Capital goods tend to have a ______ lifetime. [ 2 Marks ]
Q30 (a) finite

(b) infinite
The financial market for securities with maturities of less than one year is known as _______. [ 1 Mark ]
(a) derivatives market

Q31 (b) cash market
(c) money market
(d) Rupee market
"In economics, the resources which are used to produce goods and services are called _______. " [ 2 Marks ]
(a) ?factors of products?

Q32 (b) ?factors of production?
(c) ?factors of productivity?
(d) ?factors of produce?
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_____ are sales and purchases of government securities or bonds. [ 2 Marks ]
(a) IMOs
Q33 (b) SMOs
(c) OMOs
(d) LMOs
_____ is the rate at which the central bank offers refinance to the commercial banks. [ 3 Marks ]
(a) Level rate

Q34 (b) Interest rate
(c) Duration
(d) Bank rate
_______ receipts include tax and non-tax revenue received by the government. [ 1 Mark ]
(a) Fiscal
Q35 (b) Revenue
(c) Internal
(d) External
M1 + time deposits with the banking system = [ 1 Mark ]
(a) M3
Q36 (b) M2
(c) M1
(d) M4
"By taxing the income of the rich at a much higher rate than the income of the poor, the government attempts to
reduce income inequality." [ 1 Mark ]
Q37 (a) TRUE

(b) FALSE
"Under the Banking Regulation Act, 1949, the RBI has been vested with extensive powers of supervision and control
over banks." [ 1 Mark ]
Q38 (a) TRUE

(b) FALSE
A country is said to be running a positive trade balance when its exports ______ its imports. [ 1 Mark ]
Q39 (a) exceed

(b) is less than
____ is conventionally thought of in terms of branch plant or subsidiary company operations that are controlled by
parent companies based in another country. [ 2 Marks ]
(a) FDI
Q40 (b) FPI
(c) ECB
(d) ECP
"No single commodity will give us correct picture of the general price increase in the economy. So, we must create a
______ by taking into account either all the commodities in the economy or a basket of sufficiently large number of
commodities that broadly represent the economy. " [ 1 Mark ]
Q41
(a) deflation index
(b) stock price index
(c) price index
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(d) inflation index

_______ typically refers to the use of borrowed funds to increase returns on any given investment. [ 2 Marks ]
(a) """Float"""
Q42 (b) """Deleverage"""
(c) """Margins"""
(d) ?Leverage?
______ is a comprehensive measure of a country's overall economic output. [ 1 Mark ]
(a) GDP
Q43 (b) ADP
(c) MDP
(d) LDP
M1 + saving deposits with Post office savings banks = [ 1 Mark ]
(a) M5
Q44 (b) M3
(c) M4
(d) M2
One of the important characteristics of the financial markets is that it is a source of _______. [ 1 Mark ]
(a) zero risk

Q45 (b) systemic risk
(c) known risk
(d) absolute risk
Household savings is composed of both _______ and _______ savings. [ 3 Marks ]
(a) "real, financial"

Q46 (b) "financial, physical"
(c) "cash, real"
(d) "liquid, physical"
"Labour, capital and land are considered to be __________. " [ 2 Marks ]
(a) ?factors of production?

Q47 (b) ?factors of products?
(c) ?factors of productivity?
(d) ?factors of produce?
Demand-pull inflation simply means that aggregate demand has been _______ above what the economy is capable of
producing in the short run. [ 3 Marks ]
(a) pushed'
Q48 (b) ?pulled?
(c) transcended'
(d) shot'
The ________ measures economic activity by adding all the incomes received by all the producers of output. [ 3
Marks ]
Q49 (a) expenditure approach'

(b) ?income approach?
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The Inflation at any given time is measured by computing the percentage changes in the _______ at that point of
time over the index prevailing one year previously. [ 1 Mark ]
(a) price index

Q50 (b) stock price index
(c) deflation index
(d) inflation index
The insurance sector regulator in India is the ______. [ 2 Marks ]
(a) IRDA
Q51 (b) FMC
(c) SEBI
(d) RBI
"To know whether there has been a genuine increase in economic activity and by how much, GDP measures need to
be taken at _____ prices (that is, the price level of a particular year). " [ 1 Mark ]
(a) maximum
Q52 (b) fluctuating
(c) constant
(d) minimum
_______means that the country is buying goods and services that have been produced abroad. [ 1 Mark ]
Q53 (a) Exporting

(b) Importing
"The ______ revenue of the Union Government includes administrative receipts, net contribution of public sector
undertakings including railways, posts, currency and mint and other revenues." [ 2 Marks ]
Q54 (a) tax

(b) non-tax
Inflation is the _____ of price increase. [ 2 Marks ]
(a) difference
Q55 (b) rate
(c) sum
(d) dispersion
A ______ system will only work only if two persons can be found whose disposable possessions mutually suit each
other's wants. [ 1 Mark ]
(a) payout
Q56 (b) trade
(c) transfer
(d) barter
FDI stands for ______. [ 2 Marks ]
(a) Foreign Derived Income

Q57 (b) Foreign direct investment
(c) Foreign Derivatives Investment
(d) Foreign Disposable Investment
_______ expenditure results in creation of assets in the economy. [ 3 Marks ]
Q58
(a) Depreciation
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(b) Revenue
(c) Capital
(d) Recurring
______ analyzes and studies decisions of individual economic agents and how they interact in specific markets and
allocate their limited resources to optimize their own wellbeing. [ 2 Marks ]
Q59 (a) Macroeconomics

(b) Microeconomics
"A _____ refers to a situation when an unusually large number of depositors rush in to withdraw their deposits,
fearing that the bank may fail." [ 2 Marks ]
(a) bank run

Q60 (b) bank fall
(c) bank slowdown
(d) bank implosion
Done
8 of 8 14/01/2022, 4:46 pm

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NSE - National Stock Exchange of India Ltd. https://www1.nseindia.com/education/dynaContent/mfme_paper.

NCFM Model Test Paper

(a) Cash multiplier

(a) Balance on revenue account

(a) Remain unchanged

(b) Greenfield FPI

(a) inflation index

Q11 (a) TRUE

(a) International Notes (INs)

Q13 (a) Macroeconomics

(a) Reserve Bank of India Act

Q19 (a) ?exporting?

(a) recovarable advantage

Q24 (a) food

(a) """cash money"""

(a) counter inflation

Q29 (a) Direct tax

Q30 (a) finite

(a) derivatives market

(a) ?factors of products?

(a) Level rate

Q37 (a) TRUE

Q38 (a) TRUE

Q39 (a) exceed

(d) inflation index

(a) zero risk

(a) "real, financial"

(a) ?factors of production?

Q49 (a) expenditure approach'

(a) price index

Q53 (a) Exporting

Q54 (a) tax

(a) Foreign Derived Income

Q59 (a) Macroeconomics

(a) bank run

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