GA – 04

Indian Economy

Class Assignment
1. Economic survey is published by :
(a) Ministry of Finance (b) Planning Commission
(c) Government of India (d) Indian Statistical Institute
2. The situation with increasing unemployment and inflation is termed as :
(a) hyperinflation (b) galloping inflation (c) stagflation (d) reflection
3. Which among the following formulates fiscal policy?
(a) RBI (b) Finance Ministry (c) SEBI (d) Planning Commission
4. The period of high inflation and low economic growth is termed as:
(a) Stagnation (b) Take-off stage in economy
(c) Stagflation (d) None of these
5. One-rupee currency notes bear the signature of:
(a) Prime Minister of India (b) President of India
(c) Finance Minister of India (d) Finance Secretary of India
6. The system of value added taxation is applicable to which of the following?
(a) Excise duties (b) Income tax
(c) Estate duty (d) Taxes on Agricultural income
7. When was the Reserve Bank of India taken over by the Government?
(a) 1945 (b) 1949 (c) 1952 (d) 1956
8. The National Stock Exchange functions from which of the following?
(a) New Delhi (b) Mumbai (c) Nagpur (d) Kolkata
9. If the cash-reserve ratio is lowered by the Central bank, what will be its effect on credit creation?
(a) Decrease (b) Increase (c) No change (d) None of these
10. By which bill does the government make arrangement for the collection of revenues for a year?
(a) Supplementary Budget (b) Finance Bill
(c) Fiscal Budget (d) Economic Bill
11. Which of the following is the biggest contributor of foreign exchange of India?
(a) Foreign Currency Assets (b) Gold
(c) Reserve Tranche with IMF (d) Special Drawing rights (SDR)
12. Which organisation publishes the Human Development Index?
(a) WTO (b) IMF (c) UNDP (d) World Bank
13. 20 rupee and above value notes are printed in which of the following?
(a) Currency Note Press, Nasik (b) Security Printing Press, Hyderabad
(c) Bank Note Press, Dewas (d) All of these
14. Which of the following terms indicate a mechanism used by commercial banks for providing credit to the
Government?
(a) Cash Credit Ratio (b) Debit Service Obligation
(c) Liquidity Adjustment Facility (d) Statutory Liquidity Ratio
15. Deficit financing means that the government borrows money from the
(a) RBI (b) Local Bodies (c) Big businessmen (d) IMF
16. GDP is the total value of:

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(a) All goods and services (b) All final goods and services
(c) All intermediate goods and services (d) All intermediate and final goods and services
17. In India, economy is based on:
(a) Gandhian System (b) Socialist System
(b) Capitalist System (d) Mixed Economy System
18. Which is not included in the private income arising in a country?
(a) Factor income from net domestic product (b) Net factor income from abroad
(c) Current transfers from Government (d) Current payments on foreign loans
19. Inflation in India is measured on which of the following indexes/indicators?
(a) Cost of Living Index (CLI) (b) Consumer Price Index (CPI)
(c) Gross Domestic Product (GDP) (d) Wholesale Price Index (WPI)
20. A rise in SENSEX means:
(a) a rise in prices of shares of all companies registered with Bombay Stock Exchange.
(b) a rise in price of shares of all companies registered with National Stock Exchange.
(c) an overall rise in prices of shares of group up companies registered with Bombay Stock
Exchange
(d) a rise in price of shares of all companies belonging to a group of companies registered with Bombay Stock
Exchange
21. Which of the following rates is NOT decided by the Reserve Bank of India?
(a) Bank Rate (b) Repo Rate (c) Reverse Repo Rate (d) Income Tax Rates
22. Which among the following terms is NOT related to Banking?
(a) Cash Reserve Ratio (b) Bank Rate (c) Repo Rate (d) Zero Hour
23. The budgetary deficit in the Union Budget of India is equal to:
(a) Reverse deficit plus capital deficit (b) Revenue deficit minus capital deficit
(c) Revenue deficit plus capital deficit (d) Fiscal deficit minus capital deficit
24. Which of the following is NOT a tax/duty levied by the Government of India?
(a) Income Tax (b) Education Cess (c) Service Tax (d) Toll Tax
25. Service Tax was introduced in India for the first time in the year:
(a) 1980-81 (b) 1990-91 (c) 1991-92 (d) 1994-95
26. Which of the following is true about Value of Added Tax (VAT)?
1. It is a consumption tax levied on value added to the product on every stage of its production.
2. VAT is levied by the Union Government and only a small part goes to State Governments.
3. The income tax on retailers is now decided on the basis of their VAT collection in a year.
(a) Only 1 (b) Only 2 (c) Only 3 (d) All the above
27. The exchange of commodities between two countries is referred as:
(a) Balance of trade (b) Bilateral trade (c) Volume of trade (d) Multilateral trade
28. Free trade Policy refers to a policy where there is:
(a) absent of tariff (b) restriction on the movement of goods
(c) existence of anti-dumping policy (d) encouragement for balances growth
29. In our country, which of the following affects poverty line the most?
(a) Production quantum (b) Per capita income
(c) Quantum of gold reserves (d) Level of prices
30. RBI has handed over the responsibility for the provision and supervision of finance for agriculture to
(a) SIDBI (b) NABARD (c) EXIM Bank (d) UTI
31. Credit control operation in India is performed by

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(a) Rural Banks (b) Commercial Banks (c) Reserve Bank of India (d) State Bank of India
32. The basic regulatory authority for mutual funds and stock markets lies with the
(a) Reserve Bank of India (b) Government of India
(c) Securities and Exchange Board of India (d) Stock Exchanges
33. The term stagflation refers to a situation of
(a) High rates of growth and price rise
(b) Rate of growth is greater than rate of price rise
(c) Rate of price rise is greater than rate of growth
(d) Slow rate of growth and price rise
34. _______ is the apex monetary institution of the highest authority in India?
(a) Reserve Bank of India (b) State bank of India (c) Bank of India (d) Central Bank of India
35. The first economic census was conducted by the Central Statistical Organisation in which year?
(a) 1980 (b) 1977 (c) 1970 (d) 1990
36. India joined the World Trade Organisation on:
(a) Jan 1, 1995 (b) October 10, 1994 (c) April 1, 1995 (d) Jan 1, 1994
37. National Income is the same as:
(a) Net National Product on Market value (b) Net Domestic Product at market value
(c) Net National Product at factor cost (d) Net Domestic Product at factor cost
38. Which of the following days is declared as Income tax Day?
(a) May 24 (b) June 24 (c) July 24 (d) April 24
39. Convertibility of the rupee implies:
(a) Being able to convert rupee notes into gold
(b) Freely permitting the conversion of rupee to other major currencies and vice versa
(c) Allowing the value of the rupee to be fixed by market forces
(d) Developing an international market for currencies in India
40. India's wage policy is based on:
(a) Cost of living (b) Standard of living (c) Productivity (d) None of these
41. Who wrote the book 'Planned Economy for India’?
(a) M. Visvesvaraya (b) Sardar Vallabhbhai Patel
(c) Jawaharlal Nehru (d) Mahatma Gandhi
42. The difference between the outflow and inflow of foreign currency is known as:
(a) Foreign Exchange Reserves (b) Current Account Deficit
(c) Fiscal Deficit (d) Balance of Payments
43. The Securities and Exchange Board of India (SEBI) was established in which year?
(a) 1992 (b) 1993 (c) 1994 (d) 1988
44. One of the following is not a function of Reserve Bank of India?
(a) Issuing currency notes (b) Formulating monetary policy
(c) Exercising control over all banks in India (d) Lending money to exporters
45. __________ is obtained by deducting depreciation from GDP (Gross Domestic Product).
(a) Total Domestic Product (b) Net Domestic Product
(c) Gross National Product (d) Net National Product
46. Which of the following is wrong?
(a) CRISIL = Credit Rating Information Services of India Ltd
(b) HUDCO = Housing and Urban Development Corporation
(c) NABARD = National Bank for Agriculture and Rural Development

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(d) UNDP = Undeveloped Nations Development Programme

47. The value of Rupee in India is directly dependent on:
(a) Size of total Forex Reserve of India
(b) Availability of Commodities in market
(c) VAT introduced by Government on various commodities
(d) Capital flow in the market during a given period of time
48. Temporary tax levied to obtain revenue is called:
(a) Cess (b) Sales Tax (c) Revenue Tax (d) Surcharge
49. Which of the following Committee was related with reforms in the insurance sector?
(a) Sarkaria Committee (b) Malhotra Committee
(c) Dr. Vijay L. Kelkar Committee (d) None of these
50. Quantitative Credit controls do not include:
(a) Bank Rate (b) Open Market Operations
(c) Cash Reserve Ratio (d) RBI Directives
51. Which of the following persons does not suffer during inflation?
(a) Government servants (b) Lawyers (c) Debtors (d) Creditors
52. If the RBI adopts an expansionist open market operations policy, this means it will
(a) sell securities in the open market
(b) buy securities from non-government holders
(c) openly announce to the market that it intends to expand credit
(d) offer commercial banks more credit in the open market
53. The annual report on Human Development Index prepared by UNO is based on
(a) GDP of the member country
(b) National Income of the member country
(c) Income, Health and Education of member country
(d) Production, distribution and consumption of member country
54. Division of labour is promoted by:
(a) Limited market (b) Perfect market (c) Extended market (d) Price discrimination
55. Which of the following would be ‘fixed cost’ to a manufacturing firm?
(a) Raw materials (b) Replacement of load
(c) Wages (d) Plant and machinery
56. Credit creation increases:
(a) Purchasing power of the currency (b) Real wealth of the community
(c) Real national income (d) Supply of money
57. The State government’s responsibility for educational planning is shared by:
(a) Ministry of Planning (b) Ministry of Home Affairs
(c) Ministry of Programme Implementation (d) Ministry of Human Resource Development
58. The Reserve Bank of India issues notes under which note issue method?
(a) Proportional reserve system (b) Minimum reserve system
(c) Maximum fiduciary system (d) Fixed fiduciary system
59. The first estimate of national income in India was made by:
(a) Mahalanobis (b) V. K. R. V. Rao (c) Dadabhai Naoroji (d) Shirras
60. How many languages are used in a ten rupee note?
(a) 2 (b) 7 (c) 10 (d) 15

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Indian Economy

Home Assignment
1. Devaluation of currency will be more beneficial if:
(a) prices of domestic goods remain constant (b) prices of exports remain constant
(c) prices of imports remains constant (d) prices of exports rise proportionately
2. Which of the following is the oldest stock exchange of Asia?
(a) Chittagong Stock Exchange (b) Baku Stock Exchange
(c) Bombay Stock Exchange (d) Indonesia Stock Exchange
3. Which of the following is/are correct with respect to monetary policy of RBI?
(a) CRR & SLR are calculated on ANBC.
(b) MSS stands for Marginal Standing Scheme.
(c) Repo Rate and Bank Rate are part of LAF
(d) Monetary Policy is drafted by a committee of 6 members called as Monetary Policy Committee.
4. Arrange in the right order the contribution of sectors to the GDP from lowest to highest.
(a) Tertiary, Manufacturing, Agriculture (b) Agriculture, Manufacturing, Tertiary
(c) Agriculture, Tertiary, Manufacturing (d) Manufacturing, Agriculture, Tertiary
5. Which of the following is not true about the Reserve Bank of India?
(a) It regulates the currency and credit system of India
(b) It maintains the exchange value of the rupee
(c) Foreign exchange reserves are kept by RBI
(d) One rupee notes and coins are issued by RBI
6. National income of India is compiled by:
(a) Finance Commission (b) Indian Statistical Institute
(c) National Development Council (d) Central Statistical Organisation
7. National income is the same as :
(a) Net Domestic Product at market price (b) Net Domestic Product at cost factor
(c) Net National Product at market price (d) Net National Product at factor cost
8. Taxation and the government's expenditure policy are dealt under the :
(a) trade policy (b) budget (c) fiscal policy (d) monetary policy
9. Match the following :
A. Fiscal Deficit 1. Difference between Total Expenditure and total receipts
B. Budget Deficit 2. Difference between Revenue Expenditure and Revenue Receipt
C. Revenue Deficit 3. Difference between Total Expenditure and Revenue Receipts plus non-
debt creating capital receipts.
D. Primary Deficit 4. Difference between Total Expenditure and Revenue Receipts plus non-
debt creating capital receipts minus interest payments
A B C D
(a) 3 1 2 4
(b) 4 3 2 1
(c) 1 3 2 4
(d) 3 1 4 2
10. BOP (Balance of Payment) refers to:
(a) transactions in the flow of capital
(b) transactions relating to receipts and payment of invisibles

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(c) transactions relating only to exports and imports

(d) systematic record of all its economic transaction with the rest of the world
11. The headquarters of IMF and World Bank are located at:
(a) Geneva and Montreal (b) Geneva and Vienna
(c) New York and Geneva (d) Both Washington DC
12. "World Development Report" is an annual publication of:
(a) United Nations Development Programme
(b) International Bank of Reconstruction and Development
(c) World Trade Organisation
(d) International Monetary Fund
13. The G-8 countries include:
1. France 2. Germany 3. Canada 4. Italy
5. Netherlands 6. U.K. 7. U.S. 8. Russia 9. Japan
(a) 1, 2, 3, 4, 6, 7, 8, 9 (b) 1, 2, 4, 5, 6, 7, 8, 9
(c)1, 2, 3, 4, 6, 7, 8, 9 (d) 1, 2, 3, 4, 5, 6, 7, 9
14. Human Development Index comprises literacy rates, life expectancy at birth and:
(a) gross domestic product per head in the US dollars
(b) gross domestic product per head at real purchasing power
(c) gross national product in US dollars
(d) national income per head in US dollars
15. Which of these are nicknamed 'Bretton Woods Twins'?
1. IDA 2. IMF 3. IBRD 4. WTO
(a) l and 4 (b) 2 and 4 (c) 3 and 4 (d) 2 and 3
16. What is Green Gold?
(a) Tea (b) Coffee (c) Gold (d) Rice
17. 'Conditionality' of an IMF loan to a member country stands for :
(a) interest and repayment terms of the loan
(b) an assessment of the credit worthiness of the borrower
(c) schedule of disbursement of loan installments
(d) the policy steps which the borrower country must take
18. GDR means:
(a) 'gross domestic ratio' which is a macro aggregate
(b) 'global depository receipt' which is the mechanism to raise funds from international market
(c) 'global development range' which has been set up by UNO for developing countries
(d) 'geographically developed regions' as defined by the UNDP
19. In which one of the following countries is Rupee its currency?
(a) Bhutan (b) Malaysia (c) Maldives (d) Seychelles
20. Which one of the following countries is not a member of ASEAN?
(a) Vietnam (b) Brunei Darussalam (c) Bangladesh (d) Myanmar
21. Stagflation implies a case of:
(a) galloping inflation (b) recession plus inflation
(c) adverse balance of trade (d) rising wages and employment
22. A steady increase in the general level of prices as a result of excessive increase in aggregate demand as
compared to aggregate supply is termed as :
(a) demand-pull inflation (b) cost-push inflation

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(c) stagflation (d) structural inflation

23. If the cash-reserve ratio is lowered by the Central bank, what will be its effect on credit creation?
(a) Decrease (b) Increase (c) No change (d) None of these
24. Investors buy and sell shares in publicly leaded companies in:
(a) Money Market (b) Forex Market (c) Stock Market (d) Spot Market
25. According to Reserve Bank of India (RBI) guidelines, payment banks are not permitted to:
(a) Set up branches /ATMs
(b) Undertake utility bill payment services
(c) Issue debit cards
(d) Undertake non-banking financial services through subsidies
26. Which of the following is the minimum leading rate which the banks can charge their customers?
(a) Reverse Repo Rate (b) Other than those given as options
(c) Bank Rate (d) Base Rate
27. The primary function of the Finance Commission in India is to:
(a) distribute revenue between the Centre and the States
(b) prepare the Annual Budget
(c) advice the President on financial matters
(d) allocate funds to various ministries of the Union and State Governments
28. A tax is said to be progressive, when the marginal rate of tax is:
(a) greater than the average rate (b) less than the average rate
(c) equal to the average rate (d) equal to the marginal sacrifice
29. Methods of debt-redemption include:
(a) Capital levy (b) Sinking fund (c) Debt repudiation (d) All the above
30. The key policy rates such as the bank rate, repo rate and reverse repo rate are periodically announced by:
(a) Reserve Bank of India (b) State Bank of India
(c) National Stock Exchange of India (d) Ministry of Finance
31. Which of the following can be used for checking inflation temporarily?
(a) Increase in wages (b) Decrease in money supply
(c) Decrease in taxes (d) None of these
32. An essential attribute of inflation is :
(a) fall in production (b) increase in prices
(c) absence of black market (d) presence of black market
33. A steady increase in the general level of prices as a result of excessive increase in aggregate demand as
compared to aggregate supply is termed as :
(a) demand-pull inflation (b) cost-push inflation
(c) stagflation (d) structural inflation
34. Which of the following accounts for Cost-Push Inflation?
(a) Increase in money supply (b) Increase in indirect taxation
(c) Increase in population (d) Increase in non-plan expenditure
35. Funds belonging to Government of India are kept in :
1. Consolidated Fund of India 2. Public Account Fund of India 3. Contingency Fund of India
(a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) 1, 2 and 3