e {or foreign currency exchanged at all if dialogue heeen two people. + Twant 1 kg of mango. What will you give in exchange? 2 Team give you I par of shoes in return forthe ‘Aarushi: I don't need shoes. I want some chocolates ‘Which of the following problems is being faced by Rohit process? (0) Lack of tore of value @ Lack of (© Lack of standard of deferred payment (d) Absence of 1 Money is (@) anything which requires double coincidence of wants (@) anything which is commonly accepted asa meslium of exchange (6) anything which is commonly accepted as a commodity money (@) none of these Evolution of money has facilitated (@) common unit of exchange (@)store of value (6 wansler of value a)all ofthese 1. With the introduction of mone (a) acts of sale and purchase have been separated (acts f exchange have been separated (6) acs of production and consuamption have been separated (@) both ()and Money which is accepted asa medium of exchange because ofthe trust the payce is calle: (@) ful bodied money (0) exedit money (©) iat money (a) fiduciary money Money that is issued by the duthority of the government is elle 6) full bodied money (0) exedit money (© fiat money (fiduciary money Money value is equal to commodity value in case of (a) fit money fall bodied money {© fiduciary money (2) cvedit money Electronic transfer of money in terms of credivdebit entries of the G@ emarkeiing (e-business ay a fd) ebanking coins are} kof tn of Fist he follow es) deposits are hich nt ch ae Be and) } The RBI “The governme) jh af the Foto Reserve Bank i) Minty of Fi ine coinciden shatter ssem “(0 either 0 Full bodied mone fa) money vale {@) money value + Inia, coms (@) Saxe Bank of © Ministry ofis the correct explanation of not the correct explanation ofRee _— 4, After a downward tr din GST collection (owing to COVID-19), the RBI report Sugeest marginal recovery in October 2020 compared to same month last year: Doest it #UZESI6 none of the tw 1 Ine added tax 2. (a) is shifted to the final users of che conanodit 3 0 nd 4. (¢) both @) and (6) Read the following news report carefully and answer the questions 1-4 on the basis of the same India’s fiscal deficit is expected (0 touch 7 per cent of GDP in 2020-21 fiscal as budget estimate of 3.5. per cent, with revenne collections being hit amid disruptions in economic tivities due to lockdowns. The impact of the lockdown on economic activity shows up starkly 1 the trends in the central government revenue collection during the first three months: { fiscal 2020-21, As per data released by the Control General of Accounts (GGA), the central ‘ernment’s revenue in QI (April-June) of the current fiseal year is much lower than collections jor the correspondin od last yeat: Revenue from income taxes (personal income tax and porate income taxes) was lawer by 30.5 per cent, and the GST by al st 3 per cent during ne period, —the Economic Ties, ust 30, 2020 1, Borrowings= ___ __ per cent of GDP, as expected in 2020-21. 2, Revenue Deficit (@) Revenue expenditure + Revenue receipts Revenue expenditure ~ Revenue receipts } Revenue expenditure x Revenue receipts ) Revenue expenditure + Revenue receipts 3. Corporate tax is alan: direct tx () indirect tax (©) paper tax Gd) none of these 44, Das to lockdown, lower economie activity in the economy tends to the fiscal deficit. ease (b) decrease (© stabilise (@) mone of these Answers L @7 1) Revenue expenditure ~ Revenue receipts 3. (@) direct tax 4. (a) increase Government Budget and The Economy 37ie Reason (RB F ‘Ans, (0) Both Assertion (A) and Reason (R) are trve andl Reason (R) is mor th Assertion (4) & Read the following statements—Assert alternatives given below: Assen (4)+ Expendinne on interest paymentisacapialespendiures | Reason. (R): Expenditure on interest payment neither creates assets nor cats in fables forthe government 1e correct expla: mn (A) and Reason (R). Choose one of the ‘Alternativ {u) Both Assertion (A) and Reason (R) are ue and Reason (R) is the Assertion (A) (6) Both Assertion (A)and Reason (R) are rue and Reason (R) is not the correct exp Assertion (A) (6) Assertion (A) is rue but Reason (R) is false (4) Assertion (A) is alse but Reason (R) is true Ans. (d) Assertion (A) is false but Reason (R) is true 9. Read the following statements—Assertion (A) and Reason (R). Choose one of the « alternatives given below: Assertion (A): Money received through disinvestment is capital receip Reason (R): Money received through disinvestment causes reduction in assets of th government Alternatives: (a) Both Assertion (A) andl Reason (R) are true and Reason (R) is the correct explanatic Assertion (A) (&) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explan Assertion (A) (9 Assertion (A) is trae but Reason (R) is false (@ Assertion (A) is Ans. (a) Both Assertion (A) and Reason (R) are true Assertion (A) alse but Reason (R) is true and Reason (R) is the correct explanatic 10. Read the following statements—Assertion (A) and Reason (R). Choose one of the cor alternatives given below. ‘ Assertion (A): Reason (R): Alter (@) Both Assertion (A) and Reason (R) are true and Re: ee ‘ ‘and Reason (R) is the correct explanati Deficit budget is not desired during periods of inflation Surplus budget is not desired duning periods of depression (b) Both Assertion (A) and Reason (R) are Assertion (ay nt Reason (8) aretrue and Reason (Ris noethe correct expla" (0) Assertion (A) is true but Reason (R) is false (d) Assertion (A) s false but Reason (R) is true ‘Ans. (6) Both Assertion (A) and Reason (12 ara seen ——1 m= Deter oy h em = Spot es th Ez Choose th 1 Fe G @ @ « 2B aBASIC CONCEPTS = Meaning of Exchange Rate to the rate at which one curency exchanges forthe other inthe international et, also called international money market ample »changes for srt Indian rupees, Ascordngly the exchange ate = 1:60. 1 Types of Exchange Rate: Fixed and Flexible (Variable) © Fixed Exchange Rate is related 1 dard f 7,000 Indian rupees buy a gram of gold an d 2 glam of gold the exchange rate betvieen collar and rupees would be © Flexible (Variable) Exchange Rate depen je mark rations i rmination of Exchange Rate © Determination of Fixed Exchange Rate: ‘© Determination of Flexible Exchange Rate: Fc snexchange market exchange rate nd and supply in the f "= Spot and Forward Markets of Foreign Exchange © Spot Market lates to all such transactions in foreign exchange which are completedMulfled at and are nat carried forward for any future date © Forward Market relates to al such transactions in foreign exchange which are committed at @ 2 but are tobe completed /ulfiled at some future date atone ket sue ey Choose the correct option: 1. Foreign exchange rate refers to: ) the price of one currency in terms of gold inthe domestic market ae () the price of one curren in elation to other currence in the international money masker (the price of domestic currency in telat to Foreign curreny nthe international money market a () both (hyand @) 2. Exchange rate is the price of a currency expressed in terms oft (@) gold @) metal (6 another currency @) none otthese ge rate is determined by the government of mand for different currencies in supply and dermand, is determined by the forces of Foreign4, In the fixed exchange rate regime, (a) World Bank (©) World Trade Organisation (@) Imernational Monetary Fund {) Buropean Central Bank ‘Answers 1. (@) exports from Venezuela will increase 2 (a) increase in supply of foreign currency in the international money market 3. (dl) both (a) and (b) 4, () International Monetary Fund ASSERTION-REASON QUESTIONS. adjustment of parity value was possible only ifallowed by: 1. Read the following statements—Assertion (A) and Reason (R). Choose one of the correct alternatives given below: Assertion (A): In case of curreney depreciation, more rupees are to be paid t dollar Reason (R): Domestic currency (rupee) loses its value in relation to US dollar: Alternatives: (u) Both Assertion (A) and Reason (R) are tr Assertion (A) i () Both Assertion (A) and Reason (R) are trae and Re Assertion (A) (@ Assertion (A) is true but Reason (R) is false (@) Assertion (A) is false but Reason (R) is true Assertion (A) nnd Reason (R) is the correct explanation of on (R) isnot the correct explanation of ‘Ans. _(B) Both Assertion (A) and Reason (R) are true and Reason (R)is not the correct explanation of x 2 Read the following statements—Assertion (A) and Reason (R). Choose one of the correct t altern: Assertion (A) 5 whatsoever ives given below: in case of devaluation, de market forces of supply and demand play no role Reason (R): Devaluation leads to excess demand of foreign currency in the international money market Alternatives: (2) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) () Both Assertion (A) a Assertion (A) (0) Assertion (A) (@) Assertion (A) is false but Reason (R) is true ‘Ans. _(¢) Assertion (A) is true but Reason (R) is false is true but Reason (R) is false «Reason (R) are true and Reason (R) isnot te correct explanation of 3. Read the following statements —Asserton (A) and Reason (R). Choose one of the correct alternatives given below: Assertion (A) Forward rate of exchange isa contractual rate of exchange, Reason (R): Forward rate of exchange isa contract signed today but are to be honoured sometimes in the furare, Forsion Exchanna Rata.Bf ving res aes ta np the errerenal blk oe0h bane dence colon the (Wag pane os (@aencciiee is on (tate sep 4) momste ott yume were 2 monteea cata soe ie wives in ia anita he on a9 father of he Gen Reltion? 18 MS. Suan heen 1) Maan Singh ral a, Males ipo ge pottis is nounHin ntsPoth nd ogee Ey ine the mute ot poe a ex rem. dae, spre ot dee - en ee 1) Pine Mine a ‘Naina! Urban Live hi Nao calaaions, poner ince flat ingon the sis oe a SHaMA 36 ue, Telliod cs OM fe, hen ee cas. The ta easily or het 0 ec grin en od by aoreine nich NRT ay Se na Gr Deis he ser pore Sra 45 8, compton a Me Sie het pn ene poverty crac ena ae so Drones Ban, 1 eraser “yan oor (2500 aenes| (4) 2800 cali o estimate the nomber of samplingor ecg indindes‘dhuraing por an ofthese pane 4 sidesBethe cree extn, Hotthe cones ex, i dey Mea Scheme ana sop Bathe corr eran, govenment aed, al bls and ter cho JNREGA, employment vote for ais (8) ee an Reton and Economic Growth fanlends to ecorcmic rh by Wop fiend meterlenormers stant (Ry is the correct espns tyhuman capil sen wider. pital does on eeeora dy scorvect explaine poten ging ne ee Sram ih een a Diserinatcn ot matic norman man epi fret na ein = cclis oes sf wed ale cop PY hoe pad =f te ey stent Waone ofan TOBSE Sen imesh the cones of (anc arin (ay sene sftee “Revi ‘er ofatetie 30 ay er 10 iy Bo ma ery $5.0) SO Fal ey, ly and anseer he iene nth oi of mpg the uly ea cn gto sts C80 itt wll se ecgHONS Tt on thesis, atonal Sani BIDE Ahe psp of re With poutine market Tas Hs ie the bal fel cas dlgree os fmdernised Beret cn Halicady ceding | SS seni le en ps Bisel. To cso tr fics recog Be Efi of ro Busnes Roe SiS nd spn eee > Sacer and Deepa a Men rat aren tal development : Beak sap level es charge¥y inna ypotietcl ete ny arya ener qe HEAL as notbeen a proiy a ty Pct nan on eens Tha Pe vce lon one aaa Elbe decal 191-200 icing ced nadcre egies duction, the produiity of hover ely ‘cope mene Bronnes per hectare in 199|.0 9 tone ger pecan IO Hitee Mision eas launched in 2 by the Goveromet Sts promote ntez rated descloprcrtinhetntinte ewes ed Simulating and suswiing ie production an roceeingof ean ants to note thax golden revlon ako eto sign in “ving 1a spurt in the producto oTowers cultural crops, Golden Revolution caused an increase i the {ay poatoy stone, (Alef atement Seng produc sus aan oO aie ih ilk : Bee deseo eaharketng a Agia Narlcors Bi fe on the avis of te sch 2s cn et nner oop ollnlepe Fsmarking i Sinica propane ep de mathe tem, ee eof employes ded BLS the core: essing (Ris pot the coer Reson Wiehe ur Reason Rs re but Reno (8) leexchange reserves by government it receipts of the ws None othe ) end Reason (R) ae gc, Chose mo he (R) are true and Reason (fh (are true and Ke but Reason (R) is falePractice Papers 189Practice Papers [201decreas inca serve a "ART B: INDIAN ECONOMIC DEVELOPME multiple choice questions. 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