ECONOMY 700 MCQs With Explanatory Note

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Index
ECONOMY D -1 –
D-86
1.
Micro-Macro Economics 1-8
• Demand & Supply/Price/Revenue & Cost
• Profit & Loss/Recession & Depression
• Market, Factors of Produc on & Infla on
2. Public Finance in India 9 - 29
• Budget, Deficit Financing & Government Subsidies
• Taxes: Types & Methods
• Banking & Insurance
• Stock exchange & SEBI
3. Indian Economy 30 - 62
• Na onal Income & Human Development Index
• Five year Plans
• Poverty & Unemployment
• Agriculture Sector
• Industries: Manufacturing & Service Sectors
4. Business & Foreign Trade of India 63 - 69
• Business/ En es Types of Companies
• Business/Corporate Governance/ Terms
• Foreign Trade Policies
• Foreign Exchange Services
• Special Economic Zones & FDI
5. World Economy/Miscellaneous 70 - 86
Demand & Supply/Price/Revenue & Cost

1. Devaluation usually causes the internal price to
(a) Fall
(b) Rise
(c) Remain unchanged
(d) None of these
2. The supply-side economics lays greater emphasis on the point of view
of :
(a) producer
(b) global economy
(c) consumer
(d) middle-man
3. The price at which the Government purchase foodgrains for
maintaining the public distribution system and for building up buffer
stocks are known as
(a) Minimum support prices
(b) Procurement prices
(c) Issue prices
(d) Coiling prices
4. Which one of the following agencies of Indian Government
implements the price support scheme (PSS)?
(a) FCI
(b) NAFED
(c) Agriculture pricing agency of India
(d) None of the above
5. Who recommends the MSP and issue prices?
(a) Ministry of agriculture

(b) Planning commission
(c) Commission for Agricultural Costs and Prices
(d) NABARD
6. The base of Consumer Price Index for Industrial Workers is being
shifted from 1982 to—
(a) 1995
(b) 1998
(c) 2000
(d) 2001
7. With reference to India, consider the following statements
1. WPI is available on a monthly basis only.
2. As compare to Consumer Price Index for the Industrial Worker (CPI-
IW), the WPI gives less weightage to food articles.
Which of the statements given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
8. Which of the following would cause the aggregate demand curve to
shift to the right?
(a) an increase in purchases by the federal government
(b) an increase in real interest rates
(c) an appreciation of the American dollar
(d) a decrease in the money supply
9. Which of the following statements is true about supply-side
economics?
(a) The main change made by the tax laws of 1981 and 1986 was to
increase marginal tax rates in order to balance the budget
(b) The Laffer Curve says that, if marginal tax rates fall, tax revenues will
rise, and the budget deficit will decrease
(c) If the tax laws of 1981 and 1986 had had their intended effect,
consumption would have risen, causing an increase in both real
GDP and in the price level
(d) All of these
10. Which of the following is not a ‘Public Good’? [CDS-2016-I]
(a) Electricity
(b) National Defence
(c) Light House
(d) Public Parks
11. What is meant by price discrimination? [CDS-2015-II]
(a) Increase in price of a commodity over time
(b) A situation where the same product is sold to different consumers for
different prices
(c) Subsidization of a product by the Government to sell it at a lower price
(d) General decrease in price of a commodity over time
12. What is meant by ‘Public Good’? [CDS-2015-II]
(a) A commodity produced by the Government
(b) A commodity whose benefits are indivisibly spread among the entire
community
(c) A Government scheme that benefits the poor households
(d) Any commodity that is very popular among general public
13. In view of the fact that kerosene is an inferior good in India, what
is/are its implication(s)?
1. As households get richer, they consume less kerosene.
2. Over time there is a decline in quality of kerosene.
3. Government needs to stop subsidies on kerosene.
Select the correct answer using the code given
below. [CDS-2015-II]
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
14. Brent index is associated with [CDS-2011-II]
(a) crude oil prices
(b) copper future prices
(c) gold future prices
(d) shipping rate index
15. Which one among the following is a fixed cost to a manufacturing firm
in the short run? [CDS-2013-I]
(a) Insurance on buildings
(b) Overtime payment to worker
(c) Cost of energy

(d) Cost of raw materials
16. The income elasticity of demand for inferior goods
is [CDS-2013-II]
(a) less than one
(b) less than zero
(c) equal to one
(d) greater than one
17. The average fixed cost curve will always be
[CDS-2013-II]
(a) a rectangular hyperbola
(b) a downward sloping convex to the origin curve
(c) a downward sloping straight line
(d) a U-shaped curve
18. If the average total cost is declining then
[CDS-2013-II]
(a) the marginal cost must be less than the average total cost
(b) total cost must be constant
(c) the average fixed cost curve must be above the average variable cost
curve
(d) the marginal cost must be greater than the average total cost
19. Which of the following statements is/are true?
[CDS-2014-II]
1. If increase in demand and supply are of equal magnitude, the price will
remain unchanged, but the equilibrium quantity will increase.
2. If increase in demand is of greater magnitude than increase in supply,
both equilibrium price and equilibrium quantity will increase.
3. If increase in supply is of greater magnitude than increase in demand,
equilibrium price will fall but equilibrium quantity will increase.
Select the correct answer using the code given below :
(a) 1 only I
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
20. Which of the following statements are correct?
[CDS-2014-II]
1. When marginal revenue is positive, total revenue increases with

increase in output.
2. When marginal revenue is zero, total revenue is maximum.
3. When marginal revenue becomes negative, total revenue falls with
increase in output.
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
21. Demand for a commodity refers to [CDS-2015-I]
(a) Desire for that commodity
(b) Need for that commodity
(c) Quantity demanded of that commodity
(d) Quantity demanded at certain price during any particular period of time
22. An exceptional demand curve is one that slopes
[CDS-2015-I]
(a) downward to the right
(b) upward to the right
(c) horizontally
(d) upward to the left
23. Rise in the price of a commodity means [CDS-2015-I]
(a) rise in the value of currency only
(b) fall in the value of currency only
(c) rise in the value of commodity only
(d) fall in the value of currency and rise in the value of commodity
Profit & Loss/Recession & Depression

24. Who among the following has suggested migration to accrual
accounting system from cash based accounting system in India?
(a) I.V. Reddy
(b) D.N. Ghosh
(c) R.H. Patil
(d) C. Rangarajan
25. Consider the following actions by the Government:
1. Cutting the tax rates.
2. Increasing the government spending.

3. Abolishing the subsidies.
In the context of economic recession, which of the above actions can be
considered a part of the ‘fiscal stimulus’ package?
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
26. Which one of the following terms is used in Economics to denote a
technique for avoiding a risk by making a counteracting
transaction? [CDS-2016-I]
(a) Dumping
(b) Hedging
(c) Discounting
(d) Deflating
Market, Factors of Production & Inflation

27. Inflation is caused by
(a) Increase in supply of goods
(b) Increase in cash with the government
(c) Decrease in money supply
(d) Increase in money supply
28. The process of curing inflation by reducing money supply is called
(a) Cost-push inflation
(b) Down–pull inflation/Demand pull inflation
(c) Disinflation
(d) Reflation
29. The term stagflation refers to a situation where
(a) growth has no relation with the change in price
(b) rate of growth and prices both are decreasing
(c) rate of growth is faster than the rate of price increase
(d) rate of growth is slower than the rate of price increase
30. During period of inflation, rates should
(a) Increase
(b) Decrease
(c) Remain constant
(d) Fluctuate
31. In the paralance of economy / commerce, what is ‘Gilt-edged market’?
(a) Gold and Silver market
(b) Industrial securities market
(c) Market of safe securities
(d) Market of software technology products
32. 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)
33. When the prices of commodities, goods and services start declining
consistently, the phenomenon is known as
(a) Discount field
(b) Deflation
(c) Negative growth
(d) Market capitalism
34. The basis of determining dearness allowance (D.A.) to government
employees in India is
(a) National income
(b) Consumer Price Index
(c) Standard of living
(d) Per capita income
35. Economic growth is usually coupled with
(a) Deflation
(b) Inflation
(c) Hyper inflation
(d) Stagflation
36. Consider the following statements in regard to money market in India:
(1) It is a market for short-term funds with maturity ranging from overnight
to one year.
(2) It acts as an instrument of liquidity adjustment for the Central Bank.
(a) 1 only
(b) 2 only
(c) Both 1 and 2

(d) Neither 1 nor 2
37. Which of the following can be the outcomes of very high inflation in
the economy?
(1) Reduction in economic growth
(2) Increase in savings
(3) Reduction in exports
Select the correct answer using the codes below :
(a) 1 and 4 only
(b) 3 and 4 only
(c) 2 and 3
(d) 1 and 3 only
38. In an economy a condition of lack of money supply in comparison to
the supply of the goods services, will lead to:
(a) Inflation
(b) Deflation
(c) Hyperinflation
(d) Devaluation
39. Consider the following statements in regard to Headline inflation :
(1) It provides an accurate picture of the inflation in the country.
(2) It is affected by short term transitory effect on prices of products.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
40. Which of the following steps that will result in containing inflation?
(1) Increasing Cash Reserve Ratio (CRR)
(2) Decreasing Statutory Liquidity Ratio (SLR)
(3) Permitting Central/State agencies to import duty free pulses and sugar.
Select the correct answer using the codes given below:
(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
41. In India, inflation is measured by the :
(a) wholesale price Index Number

(b) consumers price Index for urban non-manual workers
(c) consumers price Index for agricultural
(d) National Income Deflation
42. Consider the following statements :
1. Inflation benefits the debtors.
2. Inflation benefits the bond-holders.
(a) 2 only
(b) 1 only
(c) Both 1 and 2
(d) Neither 1 nor 2
43. When economic development takes place
(a) Specialisation increases
(b) Commercialisation decreases
(c) Market imperfections increase
44. Consider the following factors regarding an industry :
1. Capital Investment
2. Business Turnover
3. Labour Force
4. Power Consumption
Which of these determine the nature and size of the industry?
(a) 1, 3 and 4
(b) 1, 2 and 4
(c) 2, 3 and 4
(d) 2 and 3
45. Disinvestment is :
(a) Offloading of shares of private companies to government.
(b) Off-loading of government shares to private companies.
(c) Increase in investment.
(d) Closing down of business concerns.
46. Which one among the following is the total amount of money available
in an economy at a specific time ?
(a) Near money
(b) Narrow money
(c) Money volume

(d) Money stock
47. Which one of the following causes the condition in which prices
increase rapidly as a currency loses its value ?
(a) Stagflation
(b) Conflation
(c) Stealth inflation
(d) Hyper inflation
48. Which one of the following is the act of stimulating the economy by
increasing the money supply or by reducing taxes ?
(a) Disinflation
(b) Reflation
(c) Inertial inflation
(d) Inflation hedge
49. Gilt-edged market means
(a) Market of government securities
(b) Bullion market
(c) Market dealing with metals
(d) Market dealing with exports
50. Which of the following is included in M1?
(a) gold
(b) checkable deposits
(c) stock
(d) credit cards
51. Which of the following is not seen as an advantage of the gold
standard?
(a) For a given stock of gold, a rise in real money supply can only occur if
the price level declines.
(b) Inflation is unlikely to emerge as a significant problem.
(c) No country needs to serve at the centre of this fixed exchange rate
system.
(d) The monetary mechanism has credibility.
52. A rapid increase in the rate of inflation is sometimes attributed to the
base effect. What is base effect?
(a) It is the impact of drastic deficiency in supply due to failure of crops.
(b) It is the impact of the surge in demand due to rapid economic growth.
(c) It is the impact of the price levels of previous year on the calculation of
inflation rate.
(d) None of the statements given above is correct.
53. A ‘closed economy’ is an economy in which
(a) the money supply is fully controlled.
(b) deficit financing takes place.
(c) only exports take place.
(d) neither exports nor imports take places.
54. Many times we read a term “Free Market” in newspapers. What does it
mean?
1. It is a market where pricing is driven by the laws of supply and demand.
2. In free market things are available without restraints of the government.
3. In such market, goods are free from extraneous influences such as
buffer or quotas.
Codes :
(a) only 1
(b) only 2
(c) only 3
(d) Both 1 and 2
55. Assertion (a) : Investment has a demand effect.
Reason (R): Investment augments the productivity and income in the
economy.
Codes:
(a) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of
(a).
(c) (a) is correct, but (R) is incorrect.
(d) (a) is incorrect, but (R) is correct.
56. Which of the following statements (s) are true with respect to the
concept of “efficiency” as used in mainstream economics?
1. Efficiency occurs when no possible re-organisation of production can
make anyone better off without making someone else worse off
2. An economy is clearly inefficient if it is inside the Production
Possibility Frontier (PPF)
3. At a minimum, an efficient economy is on its Production Possibility
Frontier (PPF)
4. The terms such as ‘ Pareto Efficiency’, ‘Pareto Optimality’ and

‘Allocative Efficiency’ are all essentially one and same which
denote ‘efficiency in resource allocation’
below: [CDS-2015-II]
(a) 1 and 4 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
57. The acronym SRO, being used in the capital market for various market
participants, stands for which one of the
following? [CDS-2008-II]
(a) Self Regulatory Organisations
(b) Small Revenue Operators
(c) Securities Roll-back Operators
(d) Securities Regulatory Organisations
58. In a perfectly competitive economy production and consumption will
both be Pareto optimal, if the economy operates at a point
where [CDS-2013-II]
(a) there is general equilibrium
(b) output levels are below equilibrium
(c) output levels are above equilibrium
(d) consumption is less than output
59. The production function of a firm will change
whenever [CDS-2013-II]
(a) input price changes
(b) the firm employs more of any input
(c) the firm increases its level of output
(d) the relevant technology changes
60. Which one among the following pairs is not correctly matched
? [CDS-2014-II]
(a) When total product : Marginal
increases at an product
increasing rate increases
(b) When total product : Marginal
increases at a product
diminishing rate , declines
(c) When total product : Marginal product
reaches its maximum becomes zero
(d) When total product : Marginal product
begins to decline becomes positive
61. The way total output changes due to change in all inputs in same
proportion is known as law of [CDS-2014-II]
(a) Returns to scale
(b) Diminishing returns
(c) Increasing returns
(d) Constant returns
62. A market in which there are large numbers of sellers of a particular
product, but each seller sells somewhat differentiated but close
products is termed as
[CDS-2014-II]
(a) Perfect competition
(b) Monopoly
(c) Monopolistic competition
(d) Oligopoly
1. (c) Devaluation is a deliberate downward adjustment to the value of a

country’s currency, relative to another currency, group of
currencies. Since it is relative to other currency so internal price
remains unchanged. It causes a country’s exports to become less
expensive and imports more expensive.
Devaluation is monetary policy tool used by countries that have a
fixed exchange rate or semi fixed exchange rate. It is often
confused with Depreciation and is the opposite of revaluation.
2. (a) Supply side economics lays greater emphasis on the point of view
of the producer whereas the demand side economics lays
emphasis on the interest of the consumer.
3. (b) The price at which the Government purchases foodgrains for
maintaining the public distribution system and for building up
buffer stocks are known as procurement prices.
Minimum support price: It is a form of market Intervention by
Govt. of India to insure agricultural producers against any sharp
fall in farm price. M.S.P. were announced by Govt of India.
Issue price : It is the price at which shares are offered to retail investors
in IPO issue.
4. (b) In Order to help the farmers in getting remunerative prices for
their produce with a view to encourage higher investment and as
also to increase production and productivity of a commodity, the
government declares Minimum Support Price (MSPs) for 25
notified agricultural commodities for each Kharif & Rabi crop
season. National Agricultural cooperative Marketing Federation
of India Ltd (NAFED) is one of the Central Nodal Agencies
which implements PSS.
5. (c) CACP was set up in 1985 and recommends for MSP, issue prices
as well as procurement prices.
6. (d) The base of CPI for industrial worker is being shifted from 1982
to 2001.
7. (b) This rise in wholesale food prices was not captured by WPI as the
weightage for food articles is just 14.3% compared to 65% for
manufactured products in this index. On the other hand, the
weightage for food is 57% in CPI items which captures the impact
of food prices better. Further, wholesale prices do not take into
account the substantial margins at the retail level, which tend to
rise when there are shortages.
8. (a) An increase in purchase by the federal Gov. causes the aggregate
demand curve to shift to the right.
9. (b) The Laffer Curve says that, if marginal tax rates fall, tax revenues
will rise, and the budget deficit will decrease.
Supply side economics is a macro economic theory that gives
economic growth can be most effectively created by investing in
capital and by lowering barriers on the production of goods and
services.
10. (a) Electricity is not public good but it is club good including roads,
bridges, gas, sewage, wires, telecom.
11. (b) When different consumers pay different prices for the same
product, this situation is known as price discrimination.
12. (b) Public good means a commodity or service which is given
without profit to everyone in a society by government or any
organisation.
13. (a) Generally Kerosene is used as fuel by the poor, as they get
prosperity, they use little of this fuel.
14. (a) Brent Crude is a major trading classification of sweet light crude
oil that serves as a major benchmark price for purchases of oil
worldwide. Brent Crude is extracted from the North Sea and
comprises Brent Blend, Forties Blend, Oseberg and Ekofisk
crudes .The Brent Crude oil marker is also known as Brent Blend,
London Brent and Brent petroleum. The index represents the
average price of trading in the 25 day Brent Blend, Forties,
Oseberg, Ekofisk (BFOE) market in the relevant delivery month
as reported and confirmed by the industry media.
15. (a) In the short run insurance premium are fixed costs because they
are independent of the level of production.
16. (b) Inferior goods have a negative(less than 0) income elasticity of
demand meaning that demand falls as income rises.
17. (a) Total fixed costs are constant, so the average fixed cost curve
diminishes with the output. Thus, the average fixed cost curve is a
rectangular hyperbola.
18. (a) When marginal cost is less than average cost, average cost must
be falling. When marginal cost exceeds average cost must be
rising. The marginal cost and average cost curves are related to
each other.
19. (d)
20. (d)
21. (d) The demand for a commodity at a given price is the quantity that
will be purchased at a unit of time and at a unit price. Demand has
the following features; Demand refers to the quantity at a given
price, Demand must be defined per unit time.
22. (b) When the curve slopes downwards from left to right; higher prices
reduce the quantity demanded.
23. (b) When the price level rises, each unit of currency buys fewer
goods and services.So rise in the price of a commodity means fall
in the value of currency only.
24. (d)
25. (a) Fiscal stimulus - Government measures, normally involving
increased public spending and lower taxation are aimed at giving
a positive jolt to economic activity.
26. (b) Hedging is used in limiting or offsetting probability of loss from
fluctuations in the prices of commodities, currencies or securities.
27. (d) Inflation is increased in the prices of commodities. It is caused
due to decrease in supply and increase in demand of commodities.
So when money supply in the economy increases it means people
have more purchasing capacity and thus demand increases which
results in inflation .
Some factors affecting inflationary pressure.
28. (c) The process of curing inflation by reducing money supply is

called disinflation. Disinflation is a decrease in the rate of
inflation – a slowdown in the rate of increase of the price level of
goods and services in GDP.
Cost pull inflation - It is caused by an increase in prices of inputs
like Labour, raw material etc. The increased price of the factors of
production leads to the decreased supply of Goods.
Demand pull inflation - It is asserted to rise when Aggregate
demand in an economy outpaces aggregate supply. It involves
inflation rising as real GDP rises and unemployment falls.
29. (d) Stagflation occurs when the economy isn’t growing but prices are
increasing, which is not a good situation for a country to be in.
Stagflation - Persistant high inflation combined with high
unemployment and stagnant demand in a country’s economy.
30. (a) During inflation interest rates should increase so that the investor
invests more in lieu of higher interest earning thus money supply
reduce which can reduce inflation. Similarly higher interest rates
means credit becomes costly so that again supply of money
reduces which helps in curbing inflation.
31. (c) In the parlance of economy, Gilt-edged market is called market of
safe securities. “Gilt-edged” denotes high-grade securities,
consequently carrying low yields.
32. (d) Inflation in India is measured on the Wholesale Price Index

(WPI). The wholesale price index (WPI) is based on the
wholesale price of a few relevant commodities of over
commodities available.
Cost of Living Index - It is a theoretical price index that
measures relative cost of living over time or regions.
Consumer Price Index - It is a measure that examines the
weightest average of prices of a basket of consumer goods &
services such as transportation food and medical care.
33. (b) When the prices of commodities, goods and services start
declining consistently, the phenomenon is known as deflation.
Deflation is because of fall in the aggregate level of demand. That
is, there is a fall in how much the whole economy is willing to
buy and the price for goods.
Negative Growth - It refers to a contraction in business sales or
earning. It is also used to refer to a contraction in country’s
economy as evidenced by a decrease in its GDP during any
quarter of a given year.
Market Capitalism - An economic system which supports
private enterprise within a free market, the means of production
being privately owned.
34. (b) The basis of determining dearness allowance (D.A.) to
government employees in India is consumer price index. Dearness
Allowance (DA) is an allowance paid to employees to compensate
them for erosion of real income / wage due to inflation. The
increase in the cost of living and the consequent erosion of
income is measured in terms of a consumer price index number
and, DA to be sanctioned to employees is determined on the basis
of the percentage increase in that index.
Dearness Allowance - D.A. is calculated as a percentage of an
Indian citizen’s basic salary to mitigate the impact of inflation on
people.
35. (b) With increase in GDP, aggregate demand increases, because more
production means people have more disposable income, which
means more consumer spending. As a result, prices rise in
response, and in conclusion because aggregate demand grows
faster than long-term aggregate supply, economic growth will be

coupled with inflation.
Hyper inflation - In economic, hyper inflation occurs when a
country experience very high and usually actuarially rates of
inflation. Economic growth is usually coupled with inflation.
36. (c) The money market consists of financial institutions and dealers in
money or credit who wish to either borrow or lend. Participants
borrow and lend for short periods of time, typically up to twelve
months. Money market trades in short-term financial instruments
commonly called “paper.”
37. (d) Inflation is a persistent increase in the general price level of goods
and services in an economy over a period of time . When the
general price level rises, each unit of currency buys fewer goods
and services. Consequently, inflation reflects a reduction in the
purchasing power per unit of money – a loss of real value .High
inflation means excessive supply of money and thus leads to rise
in the cost of credit and interest rates. Higher inflation leads to
reduction in economic growth, decrease in cost of credit, increase
in spending rather than saving as the value of money is declining.
38. (b) Deflation may be caused by a combination of the supply and
demand for goods and the supply and demand for money,
specifically the supply of money going down and the supply of
goods going up.
39. (b) Headline inflation also called as WPI inflation is a measure of the
total inflation within an economy and is affected by areas of the
market which may experience sudden inflationary spikes such as
food or energy. As a result, headline inflation may not present an
accurate picture of the current state of the economy as it doesn’t
take account of service sector.
40. (b) In order to curb inflation if CRR is increased, then it may take
liquidity from markets as banks will have to deposit more money
with RBI. Moreover inflation may also be curbed by Permitting
Central/State agencies to import duty free pulses and sugar.
However, Decreasing SLR will leave more money with banks to
give loans, which in turn will lead to inflation.
41. (a) In India, inflation is measured by the wholesale price Index . The
wholesale prices of commodities of base year are compared with
wholesale prices of current year to compute inflation.
42. (b) Inflation redistributes wealth from creditors to debtors i.e., lenders
suffer and borrowers benefit out of inflation. Bond holders = this
person has lend money (to debtors) and received bond in return.
So he is lender, he suffers, by the way they haven’t specifically
used the word – “inflation indexed bonds”, hence we cannot say
inflation benefits the bond-holders.
43. (a) When economic development takes place, specialisation
increases. Economic development typically involves
improvements in a variety of indicators such as literacy rates, life
expectancy and poverty rates. GDP does not take into account
other aspects such as leisure time, environmental quality, freedom,
or social justice; alternative measures of economic well-being
have been proposed.
44. (a) The factors which are responsible for an industry are capital
investment, labour force and power consumption. However,
nature and size of business is not determined by the turnover of
business.
45. (b) Disinvestment is a process in which off-loading of government
shares is done to private companies. A company or government
organization will divest an asset or subsidiary as a strategic move
for the company, planning to put the proceeds from the divestiture
to better use that garners a higher return on investment.
46. (d) The money supply or money stock, is the total amount of
monetary assets available in an economy at a specific time. It
includes currency in circulation and demand deposits.
Near money : assess which can readily be converted into cash,
such as bells of exchange.
Narrow money : Money in forms that can be used as a medium
of exchange generally notes, coins and certain balances held by
bank.
47. (d) Hyper inflation occurs when a country experiences very high and
usually accelerating rates of monetary and price inflation, causing
the population to minimize their holdings of money. Under such
conditions, the general price level within an economy increases

rapidly as the official currency quickly loses real value.
Stagflation : Persistent high inflation combined with high
unemployment.
Conflation : The merging of two or more sets of information
texts, ideas etc into one.
Steath inflation : It is a type of charges or fees created by
business to gain extra profit and revenue from its customers.
48. (b) Reflation is the act of stimulating the economy by increasing the
money supply or by reducing taxes, seeking to bring the economy
(specifically price level) back up to the long-term trend, following
a dip in the business cycle.
Disinflation : Reduction in the rate of inflation.
Inflation Hedge : It is an investment with intrinsic value such as Oil,
Natural Gas, Gold, farmland and to a lesser degree commercial
real state.
49. (a) The gilt-edged market refers to the market for Government and
semi-government securities, backed by the Reserve Bank of India
(RBI). Government securities are tradeable debt instruments
issued by the Government for meeting its financial requirements.
The term gilt-edged means ‘of the best quality’.
50. (b) M1 measures the most liquid components of the money supply, as
it contains cash and assets that can quickly be converted to
currency.
M0 + M1 - Narrow money - includes coins and notes in
circulation and other money equivalents that are easily convertible
into cash.
M2 - M1 + short term deposits in banks.
M3 - M2 + long term deposits and money market fund.
M4 - M3 + other deposits.
51. (a) For a given stock of gold, a rise in real money supply can only
occur if the price level declines.
The blue fit of Gold standard is that a fixed assets back the money
values. It provide a self regulating and stabilizing effect on the
economy that discourages the inflation.
52. (c) The base effect relates to inflation in the corresponding period of
the previous year: If the inflation rate was too low in the
corresponding period of the previous year, even a smaller rise in
the price index will arithmetically give a high rate of inflation.
53. (d) This is an economy that does not interact with the economy of any
other country. A closed economy prohibits imports and exports
and prohibits any other country from participating in their stock
market.
54. (d)
55. (a) Investment in capital and labour will increase productivity and
production which will cause either rise in wages or creation of
employment or both thus the overall income will rise.
56. (a) When the re-organisation of production is not possible which can
make any one better off without making someone else worse off
then efficiency occurs. Pareto Efficiency, Pareto Optimality and
Allocative Efficiency are all the same and indicates “efficiency in
resource allocation”.
57. (a) A self-regulatory organization (SRO) is a non-governmental
organization that has the power to create and enforce industry
regulations and standards. The priority is to protect investors
through the establishment of rules that promote ethics and
equality.
58. (a) General equilibrium involving both production and consumption
also ensures the achievement of pareto efficiency. Pareto
efficiency in this regard requires that marginal rate of
transformation should be equal to the marginal rate of substitution
of the individuals.
59. (d)
60. (d)
61. (a) The way total output changes due to change in all inputs in the
same proportion is known as “law of return to scale”.
62. (c) Monopolistic competition is a form of market in which there are
large numbers of sellers of a particular products but each seller
sells somewhat differentiated but close products.
Budget, Deficit Financing & Government Subsidies

1. Which one of the following is a development expenditure?
(a) Irrigation expenditure
(b) Administration
(c) Debt services
(d) Grant-in-aid
2. Which of the following is not an example of economic overheads?
(a) Schools
(b) Sanitary facilities
(c) Roads and Railways
(d) Coal mines
3. Development expenditure of the Central government does not include
(a) defence expenditure
(b) expenditure on economic services
(c) expenditure on social and community services
(d) grant to states
4. Which of following statement is true about the Primary deficit?
(a) It is difference between Revenue Receipts and Revenue Expenditure
(b) It is difference between Capital Receipts and Interest Payment
(c) It is difference between the Fiscal Deficit and Interest Payment
(d) It is addition of Fiscal Deficit and Interest Payment
5. Consider the following statements in regard to Zero Base Budgeting
(ZBB) :
(1) Existing Government programmes can be discarded under ZBB if they
are found to be outdated.
(2) ZBB is difficult to be applied to Human Development programmes as
the outcome of such programme is intangible in nature.

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
6. Which of the following are correct in regard to the austerity measures
taken by a country going through adverse economy conditions:
(1) These measures include a reduction in spending.
(2) These measures include an increase in tax
(3) These measures include reduction in budget deficit.
Select the correct answer using the codes given below :
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
7. Which of the following is not a part of India’s National Debt?
(a) National Savings Certificates
(b) Dated Government Securities
(c) Provident Funds
(d) Life Insurance Policies
8. Which of the following will not contribute to a higher current account
deficit?
(1) Increase in price of crude oil
(2) Rise in export of software services
(3) Rise in import of services
Choose the correct answer using the codes given below:
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1 and 3 only
9. Consider the following :
1. Market borrowing
2. Treasury bills
3. Special securities issued to RBI
Which of these is/are components of internal debt?
(a) 1 only
(b) 1 and 2
(c) 2 only
(d) 1, 2 and 3
10. In India, deficit financing is used for raising resources for:
1. redemption of public debt
2. adjusting the balance of payments
3. reducing the foreign debt
4. economic development
Which of the above statements is/are correct ?
(a) 4 only
(b) None of the above
(c) 2 and 3 only
(d) 1 and 2 only
11. Deficit financing leads to inflation in general, but it can be checked if:
(a) government expenditure leads to increase in the aggregate supply in
ratio of aggregate demand
(b) only aggregate demand is increased
(c) all the expenditure is denoted national debt payment only
(d) All of the above
12. Match List I with List II and select the correct answer using the codes
given below the lists :
List I (Term) List II (Explanation)

A. Fiscal deficit 1. Excess of total expenditure
over total receipts
B. Budget deficit 2. Excess of revenue expenditure
over revenue receipts
C. Revenue deficit 3. Excess of total expenditure
over total receipts less
borrowings
D. Primary deficit 4. Excess of total expenditure
over total receipts less
borrowings & interests
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
13. Which of the following is / are the example (s) of Transfer
Payment(s)?
1. Unemployment Allowance
2. Payment of salary
3. Social Security Payment
4. Old age Pension
below: [CDS-2016-I]
(a) 1 and 3 only
(b) 1, 2 and 3 only
(c) 1, 3 and 4 only
14. Consider the following statements about Sinking
Fund [CDS-2011-II]
1. It is a method of repayment of public debt.
2. It is created by the government out of budgetary revenues every year.
Which of the statements given above is/are contact?
(a) Oniy 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
15. Statement I: Deficit financing does not lead to inflation if adopted in
small doses.
Statement II: Deficit financing is an often used tool for financing
budgetary deficits. [CDS-2011-II]
Codes :
(a) Both the Statements are individually true and Statement II is the correct
explanation of Statement
(b) Both the Statements are individually true, but Statement II is not the
correct explanation of Statement I
(c) Statement I is true, but Statement II is lalse
(d) Statement I is false, but Statement II is true
16. The concept which tries to ascertain the actual deficit in the revenue
account after adjusting for expenditure of capital nature is termed
as [CDS-2013-I]
(a) revenue deficit
(b) effective revenue deficit
(c) fiscal deficit
(d) primary deficit
17. Second demonetization of currency notes in independent India took
place during the tenure of .................... as Minister of Finance, Gol.
(a) H.M. Patel
(b) Morarji Desai
(c) C.D. Deshmukh
(d) Vishwanath Pratap Singh
18. India’s first Long term Fiscal policy was adopted during the tenure of
..................... as Minister of Finance, GoI.
(a) Dr. Manmohan Singh
(b) Yashvant Sinha
(c) Vishwanath Pratap Singh
(d) Pranab Mukherji
19. Which Finance Commission has used forest cover as a criterion for
horizontal distribution of resources in India?
[UGC-2016]
(a) 10th Finance Commission
(b) 12th Finance Commission
(c) 13th Finance Commission
(d) 14th Finance Commission
20. Which one of the following measures is not likely to aid in improving
India’s Balance of Payment position?
[BPSC 2017]
(a) Promotion of Import Substitution Policy
(b) Devaluation of rupee
(c) Imposition of higher tariff on imports
(d) Levying of higher duties on exports

21. With reference to Indian economy, consider the following—
1. Bank rate
2. Open market operations
3. Public debt
4. Public revenue
Which of the above is/are component/components of Monetary Policy?
(a) 1 only
(b) 2, 3 and 4
(c) 1 and 2
(d) 1, 3 and 4
22. The first phase of liberalization was initiated in India under the
regime of— [UK-PSC 2016]
(a) Rajiv Gandhi
(b) P.V. Narsimha Rao
(c) Atal Bihari Vajapayee
(d) H.D. Dev Gowda
Taxes: Types & Methods

23. What do you understand by ‘regressive taxation’?
(a) Tax that takes a larger perentage from low-income people than from
high income people.
(b) Taxation where the tax rate increases irrespective of fall or rise in
taxable incomes.
(c) Taxation where the tax rate increase with the increase of taxable income
(d) None of above
24. Which of the following best explains the cascading effect of taxation?
(1) When tax imposition leads to a disproportionate increase in prices by an
extent more than the rise in the tax.
(2) When tax imposition leads to a disproportionate decrease in prices by
an extent more than the rise in the tax.
(3) When tax imposition leads to a disproportionate decrease in imports.
(4) When tax imposition leads to a disproportionate decrease in exports.
(a) 1 only
(b) 2 and 3 only
(c) 4 only
(d) 3 and 1 only
25. Which of the following is associated with fiscal policy?
(a) Inflation
(b) Taxation
(c) Consumption
(d) Money supply
26. ‘Fiscal Drag’ expresses the impact of inflation on which of the
following ?
(a) Fiscal Deficit
(b) Tax Revenue and GDP
(c) Black money
(d) Investment
27. Which of the following should be considered for ‘Pigovian taxation’?
(1) Consumption of cigarettes
(2) Research for new technologies
(3) Burning of fossil fuels
(4) Restoration of lost cultural heritage
(a) 1 and 3 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3
(d) 2 and 4 only
28. ‘Basel III’ norms target at which of the following?
(1) Improve the banking sector’s ability to absorb shocks arising from
financial and economic stress.
(2) Improve risk management and governance.
(3) Strengthen banks’ transparency.
(a) 1 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
29. Which of the following is the characteristic of progressive tax?
(1) Marginal tax rate should be increasing.
(2) Marginal tax rates should be more than average tax rate.

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
30. Consider the following statements in regard to the Goods and Service
Tax:
(1) The GST shall have two components : one levied by the centre, and the
other levied by the states.
(2) The central GST and state GST are to be paid to the joint accounts of
the centre and the states.
(3) While the imports would be zero-rated, the exports would be
subjected to the GST.
Which of the above statements is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3
(d) 1 and 2 only
31. The Minimum Alternative Tax (MAT) was introduced in the budget of
the Government of India for the year?
(a) 1991-92
(b) 1992-93
(c) 1995-96
(d) 1996-97
32. Consider the following statements:
I. Government disinvesting its share in various public sector undertakings
II. Process of disinvestment is very fast
III. Process of disinvestment is very slow and government always falls
short of target
Which of above statements is/ are true about government policy of
disinvestment
(a) Only I
(b) I and III
(c) I and II
(d) I, II and III
33. PAN card issued by the Income Tax Department can’t be used for
which of the following purpose?
(a) proof of address
(b) proof of identity
(c) proof of registered tax payer
(d) proof of date of birth
34. Which one of the following agencies assigns the Agricultural Income
Tax to states in India?
(a) Inter – State council
(b) National Development Council
(c) Agriculture Finance Corporation
(d) Finance commission
35. Which one of the following states is the first state to impose
Agriculture Income Tax in India?
(a) Madhya Pradesh
(b) Uttar Pradesh
(c) West Bengal
(d) Bihar
36. Consider the following statements about the Agriculture Income Tax
1. Agriculture Income Tax is levied and collected by the Union
Government.
2. Agriculture Income Tax is levied throughout the country in India.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
37. The Government of India earns maximum revenue from
(a) Income tax
(b) Union excise duty
(c) Customs duty
(d) Corporation tax
38. The representation of the relationship between possible rates of
taxation and the resulting levels of government revenue is called
(a) Laffer curve
(b) Griffin curve
(c) Philips curve

(d) Gini’s curve
39. The largest tax collected at the federal government level is the:
(a) Income tax
(b) Sales tax
(c) Property tax
(d) Social security tax
40. Indicate the sequence of the following in terms of the implementation.
1. Income Tax
2. Expenditure Tax
3. Value Added Tax
4. Fringe Benefits Tax
Codes:
(a) 1, 3, 2, 4
(b) 1, 2, 3, 4
(c) 2, 3, 4, 1
(d) 3, 4, 1, 2
1. Ability to pay principle of taxation holds that the amount of taxes
people pay should relate to their income or wealth
2. The Benefit Principle of taxation states that individuals should be taxed
in proportion to the benefit they receive from Government
programmes
3. A progressive tax takes a larger share of tax from poor families than it
does from rich families
4. Indirect taxes have the advantage of being cheaper and easier to collect
below: [CDS-2016-I]
(a) 1 and 3 only
(b) 2 and 4 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
42. Which one of the following is the major source of gross tax revenue
(GTR) for the Government of
India? [CDS-2015-II]
(a) Income tax
(b) Corporation tax

(c) Customs duty
(d) Service tax
43. Fiscal Policy in India is formulated by [CDS-2012-I]
(a) the Reserve Bank of India
(b) the Planning Commission
(c) the Finance Ministry
(d) the Securities and Exchange Board of India
44. The government can influence private sector expenditure
by [CDS-2013-I]
1. taxation
2. subsidies
3. macro-economic policies
4. grants
Select the correct answer using the codes given below
(a) 1, 2, 3 and 4
(b) 1, 2 and 4
(c) 1, 2 and 3
(d) 3 and 4
45. Which of the following are included in the category of direct tax in
India? [CDS-2013-I]
1. Corporation tax
2. Tax on income
3. Wealth tax
4. Customs duty
5. Excise duty
(a) 1, 2 and 3
(b) 1, 2, 4 and 5
(c) 2 and 3
(d) 1, 3, 4 and 5
46. In India, the price of petroleum products has been deregulated mainly
to [CDS-2013-II]
(a) reduce the burden of subsidies given to the oil companies
(b) discourage the exploration of oil reserves in the country
(c) discourage the demand for private vehicles
(d) curb the use of black money in the economy

47. Corporation tax is imposed by [CDS-2013-II]
(a) State Government
(b) Central Government
(c) Local Government
(d) State as well as Central Government
48. Corporation tax in India is levied on income of a company. Which one
of the following does not include Corporation
tax? [CDS- 2014-I]
(a) Profit from business
(b) Capital gain
(c) Interest on securities
(d) Sale proceed of assets
49. Which one among the following is not a source of tax revenue for the
Central Government in India?
[CDS-2014-II]
(a) Income tax
(b) Customs duties
(c) Service tax
(d) Motor Vehicle tax
50. Which of the following statements about Krishi Kalyan Cess (KKC)
is/are correct ? [NDA/NA-SP-2016-II]
1. KKC is calculated in the same way as Service Tax is calculated.
2. The current rate of KKC is 0.50%
3. KKC is similar to the KKS (Krishi Kalyan Surcharge).
(a) 1, 2 and 3
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1 only
51. Who had suggested an imposition of ‘expenditure tax’ in India for the
first time? [UP-PCS 2010]
(a) Kalecki
(b) Kaldor
(c) R. J. Chelliah
(d) Gautam Mathur
52. MODVAT is related to [UP-PCS 2011]

(a) Excise duty
(b) Value added Tax (VAT)
(c) Wealth Tax
(d) Income Tax
53. Which one of the following is not a tax/duty levied by the Government
of India? [UP-PCS 2013]
(a) Service Tax
(b) Education
(c) Custom Duty
(d) Toll Tax
54. With a view to redress the grievances of tax payers speedily, Income
Tax department has started a new electronic platform which is known
as— [UBI-PO 2016]
(a) e-grievances
(b) e-IT
(c) e-bharat
(d) e-nivaran
55. Consider the following taxes— [UGC-2016]
(i) Corporation tax
(ii) Income tax
(iii) Service tax
(iv) Union Excise Duties
Which of the following correclty describes their contribution, in descending
order of importance, to the Central Government’s Gross Tax Revenue?
(a) (i) (ii) (iv) (iii)
(b) (ii) (i) (iii) (iv)
(c) (iii) (ii) (i) (iv)
(d) (iv) (i) (ii) (iii)
56. If Sales tax on a commodity is raised, but the revenue earned through
its sale decrease sharply, which one of the following statements about
the nature of this commodity would be correct?
[UGC-2016]
(a) Price elasticity of demand for it is unity
(b) It must be an essential goods
(c) Price elasticity of demand for it is high
(d) Price elasticity of demand for it is low

57. Which of the following taxes fall under the state list of Indian
Constitution?
1. Entertainment tax
2. Luxury tax
3. Stamp Duty
4. Custom Duty
Select the answer using the codes given below—
(a) 1 and 2
(b) 1, 3 and 4
(c) 2, 4 and 5
(d) 1, 2 and 4
58. Which of the following Tax is levied by Union and collected and
appropriated by States? [BPSC 2017]
(a) Stamp Duties
(b) Passenger and Goods Tax
(c) Estate Duty
(d) Taxes on Newspapers
59. What is/are the most likely advantages of implementing ‘Goods and
Services Tax (GST)’?
1. It will replace multiple taxes collected by multiple authorities and will
thus create a single market in India.
2. It will drastically reduce the ‘Current Account Deficit’ of India and will
enable it to increase its foreign exchange reserves.
3. It will enormously increase the growth and size of economy of India
and will enable it to overtake China in the near future.
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
60. With reference to the ‘Prohibition of Benami Property Transactions
Act, 1988 (PBPT Act)’, consider the following statements:
1. A property transaction is not treated as a benami transaction if the
owner of the property is not aware of the transaction.
2. Properties held benami are liable for confiscation by the Government.
3. The Act provides for three authorities for investigations but does not
provide for any appellate mechanism.
(a) 1 only
(b) 2 only
(c) 1 and 3 only
(d) 2 and 3 only
1. Tax revenue as a per cent of GDP of India has steadily increased in the
last decade.
2. Fiscal deficit as a per cent of GDP of India has steadily increased in the
last decade.
Which of the statements given above is/are correct ?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Banking & Insurance

62. In India, one-rupee coins and notes and subsidiary coins are issued by
(a) The Reserve Bank of India
(b) The Central Government
(c) The State Bank of India
(d) The Unit Trust of India
63. Devaluation of currency leads to
(a) expansion of export trade
(b) contraction of import trade
(c) expansion of import substituting
(d) all of the above
64. Which of the following terms is not a financial term?
(a) Investment
(b) Core banking solution
(c) RTGS
(d) All the above
65. Money laundering normally involves
(a) placement of funds

(b) layering of funds
(c) integration of funds
(d) all the above
66. In which of the following years India switched over to decimal
currencies?
(a) 1955
(b) 1956
(c) 1957
(d) 1960
67. In which year the Indian rupee was devalued two times within a
month?
(a) 1990
(b) 1991
(c) 1994
(d) 1999
68. The one rupee note bears the signature of the
(a) Secretary, Ministry of Finance
(b) Governor, RBI
(c) Finance Minister
(d) None of these
69. Which of the following is not true when the interest rate in the
economy goes up?
(a) Saving increases
(b) Lending decreases
(c) Cost of production increases
(d) Return on capital increases
70. High rates of interest in a low inflation region
(a) attract people to make an investment
(b) discourage people to make an investment
(c) create atmosphere for capital formation
(d) are not favourable for credit expansion
71. The banks are required to maintain a certain ratio between their cash in
hand and total assets. This is called
(a) Statutory Bank Ratio (SBR)
(b) Statutory Liquid Ratio (SLR)
(c) Central Bank Reserve (CBR)

(d) Central Liquid Reserve (CLR)
72. Paper currency first started in India in
(a) 1861
(b) 1542
(c) 1601
(d) 1880
73. Note issuing department of RBI should always possess the minimum
gold stock of worth—
(a) ` 85 crore
(b) ` 115 crore
(c) ` 200 crore
(d) None of these
74. Which of the following does not grant any tax rebate?
(a) National Saving Certificate
(b) Indira Vikas Patra
(c) National Saving Scheme
(d) Public Provident Fund
75. Consider the following statement in regard to reserve currency :
(1) Reserve currency acts as the international pricing currency in the global
market for commodities like oil and gold.
(2) The country whose local currency is accepted as reserve currency gets
an added advantage in terms of lower commodity rates in the
international market.
Which of the statements given above is/are correct
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
76. Consider the following statements in regard to ‘RESIDEX’:
(1) The index is prepared to track the prices of residential properties in
India on the basis of actual transaction prices.
(2) The index is prepared from the secondary data available from various
sources like housing, finance companies and banks.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
77. Which of the following activities can lead to financial inclusion in
India?
(1) Issuing of general purpose credit cards.
(2) Strict know your customer’ (KYC) norms
(3) Opening of Bank branches in unbanked rural areas.
(4) Opening of no-frills account.
(a) 1, 2 and 3 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) 2 and 3 only
78. Currency devaluation done by the government leads to which of the
following?
(a) Fall in domestic prices
(b) Increase in domestic prices
(c) No impact on domestic prices
(d) Irregular fluctuations in domestic prices.
79. An economy with very low rate of interest and where economic agents
expect the interest rate to rise in future and consequently bond prices to
fall, causing capital loss in the economy is going through a situation
known as
(a) Hyperinflation
(b) Double dip recession
(c) Slow down in the economy
(d) Liquidity trap
(1) Fiat money is a term used for Gold coins
(2) Currency Deposit Ratio is the proportion of the total deposits
commercial banks keep as reserves.
Which of the above statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

81. When the RBI wants to inject liquidity into economy, it may adopt the
following :
(1) Buy the government securities from the banks.
(2) Enter into reverse repo operations
(3) Raise cash Reserve Ratio
(4) Reduce SLR.
(a) 1 only
(b) 1 and 4 only
(c) 1, 2 and 4 only
(d) 1, 2, 3 and 4
82. Which of the following statements is/are correct in regard to ‘micro-
finance’?
(1) Micro-credit extended by banks to individual is reckoned as a part of
their priority sector lending.
(2) RBI has prescribed a particular model the banks to provide micro-
finance.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
83. Consider the following statements in regard to devaluation and
depreciation of a currency:
(1) Devaluation is an activity conducted by central government whereas
depreciation happens due to market forces.
(2) In both the devaluation and depreciation currency loses value against
other currencies in a floating currency exchange market.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
84. Consider the following statements in regard to ‘Marginal Standing
Facility (MSF)’ of RBI :
(1) It will help in reducing volatility in the overnight lending rates in the
inter-bank market.
(2) The borrowing under the MSF should be over and above the statutory
liquidity requirement.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
85. ‘Basel III’ norms target at which of the following?
(1) Improve the banking sector’s ability to absorb shocks arising from
financial and economic stress.
(2) Improve risk management and governance.
(3) Strengthen banks’ transparency.
(a) 1 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3
86. Which of the following will not be the part of ‘financial inclusion’?
(1) Opening educational centres
(2) Opening wealth management centres by citibank.
(3) Eradication of poverty.
(4) Report of Khan commission on financial inclusion.
(a) 1, 2 and 3 only
(b) 1, 2 and 4 only
(c) 1, 3 and 4 only
(d) 1, 2, 3 and 4
87. Which of the following definitions are in correct?
(i) Basis points: increase in interest rates in percentage terms.
(ii) Repo rate: rate at which commercial banks borrow from the RBI by
selling their securities or financial assets to the RBI for a long-
period of time.
(iiii) Reverse repo rate: rate of interest at which the central bank borrows
funds from commercial banks for a short duration.
(iv) Cash reserve ratio: minimum percentage of cash deposits that banks
must keep with itself to avoid liquidity issues.
(a) (i) & (ii)
(b) (ii), (iii) & (iv)
(c) (ii) & (iv)
(d) (iii) & (iv)
88. Which of the following grants/grant direct credit assistance to rural
households ?
1. Regional Rural Banks
2. National Bank for Agriculture and Rural Development
3. Land Development Banks
(a) 1 and 2 only
(b) 2 only
(c) 1 and 3 only
(d) 1, 2 and 3 only
89. In the context of Indian economy, open market operations to :
1. borrowing by scheduled banks from RBI
2. lending by commercial banks to industry and trade
3. purchase and sale of government securities by the RBI
4. None of the above
(a) 1 and 2 only
(b) 3 only
(c) 4 and 1 only
(d) 2 and 3 only
90. If all the banks in an economy are nationalized and converted into a
monopoly bank, the total deposits
(a) will decrease
(b) will increase
(c) will neither increase nor decrease
91. Consider the following liquid assets:
1. Demand deposits with the banks
2. Time deposits with the banks
3. Savings deposits with the banks
4. Currency
The correct sequence of these decreasing orders of Liquidity is:
(a) 1-4-3-2
(b) 4-3-2-1
(c) 2-3-1-4
(d) 4-1-3-2
92. In the context of Indian economy; which of the following is/are the
purpose/purposes of ‘Statutory Reserve Requirements’?
1. To enable the Central Bank to control the amount of advances the banks
can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day
requirements
Select the correct answer using the code given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
93. The Rural infrastructure fund set up in 1995 – 96, is maintained by the
(a) Reserve Bank of India
(b) State Bank of India
(c) NABARD
(d) Regional Rural Bank
94. The head office of the National Bank for Agriculture and Rural
Development (NABARD) located in
(a) Lucknow
(b) Hyderabad
(c) New Delhi
(d) Mumbai
95. Which is not a source of agriculture finance in India?
(a) Co-operative societies
(b) Commercial Banks
(c) Regional Rural Banks
(d) None of these
96. NABARD was established in the
(a) Fourth Five Year Plan

(b) Fifth Five Year Plan
(c) Sixth Five Year Plan
(d) Eighth Five Year Plan
97. In India, which of the following has the highest share in the
disbursement of credit to agriculture and allied activities?
(a) Commercial Banks
(b) Co-operative Banks
(c) Regional Rural Banks
(d) Microfinance Institutions
98. Choose the correct statements in the context of Cooperative Banks in
India.
1. Cooperative Banks operate on no profit no loss basis.
2. Cooperative Banks are allowed to operate only in the agriculture sector.
3. NABARD is a Cooperative Bank.
(a) 1 only
(b) 1 and 2
(c) 1 and 3
(d) All of these
1. Regional Rural Banks grant direct loans and advances to marginal
farmers and rural artisans.
2. NABARD is responsible for laying down policies and to oversee the
operations of the RRBs.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
100. In India ‘Report on Currency and Finance’ is the annual publication of
(a) SEBI
(b) RBI
(c) Finance Commission
(d) Finance Ministry
101. How many seats of Deputy Governor are there in Reserve Bank of
India?
(a) 1 only
(b) 2 only
(c) 3 only
(d) 4 only
102. Who is the new Chairman of Life Insurance Corporation of India?
(a) S.K. Roy
(b) D.K. Malhotra
(c) Thomas Matthew
(d) V.K. Sharma
103. On which date is the establishment of State Bank of India celebrated?
(a) 1st January
(b) 19th June
(c) 1st July
(d) 15th October
104. The apex organisation of industrial finance in India is—
(a) IDBI
(b) RBI
(c) ICICI
(d) IFCI
105. RBI’s first census of India’s foreign Assets & Liability as on 30 June
1948 revealed total foreign business investments of ` 302 cr, out of it
what was the % of British investments in India?
(a) 51 %
(b) 60 %
(c) 72 %
(d) 91 %
1. Small Industry Development Bank of India (SIDBI) was set up as a
whole owned subsidiary of the RBI.
2. SIDBI has taken over the responsibility of administering small industry
development funds managed by the IDBI.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
107. Why is the offering of ‘teaser loans’ by commercial banks a cause of

economic concern?
1. The teaser loans are considered to be an aspect of sub-prime lending
and banks may be exposed to the risk of defaulters in future.
2. In India, the teaser loans are mostly given to inexperienced
entrepreneurs to set up manufacturing or export units.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
108. Which of the following is /are example (s) of ‘Near Money’?
1. Treasury Bill
2. Credit Card
3. Saving accounts and small time deposits
4. Retail money market mutual funds
[CDS-2016-I]
(a) 1 only
(b) 2 only
(c) 1, 2 and 3
(d) 1, 3 and 4
109. Under flexible exchange rate system, the exchange rate is
determined [CDS-2015-II]
(a) predominantly by market mechanism
(b) by the Central Bank
(c) as a weighted index of a group of currencies
(d) by the World Trade Organization
110. Which one of the following Public Sector Bank’s emblem figures a
dog and the words ‘faithful friendly, in it?
[CDS-2011-II]
(a) Punjab National Bank
(b) Syndicate Bank
(c) oriental Bank of Commerce
(d) State Bank of India
111. Consider the following statements with regard to Statutory Liquidity

Ratio (SLR) [CDS-2011-II]
1. To meet SLR, Commercial banks can use cash only.
2. SLR is maintained by the banks with themselves.
3. SLR restricts the banks leverage in pumping more money into the
economy.
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) only 2
112. The main functioning of the banking system is to
[CDS-2013-II]
(a) accept deposits and provide credit
(b) accept deposits and subsidies
(c) provide credit and subsidies
(d) accept deposits, provide credit and subsidies
113. The value of money varies [CDS-2013-II]
(a) directly with the, interest rate
(b) directly with the price level
(c) directly with the volume of employment
(d) inversely with the price level
114. The word “Actuaries” is related to [UP-PCS 2008]
(a) Banking
(b) Insurance
(c) Share-market
115. Non - performing assets in commercial banks means
[UP-PCS 2009]
(a) bank deposits which are not invested.
(b) capital assets not in use.
(c) loans in which interest or principal amount is not recovered.
(d) low - interest rate loans.
116. The Bank rate is the rate at which [UP-PCS 2009]
(a) a bank lends to the public.
(b) the RBI lends to the public.
(c) the RBI gives credit to the commercial banks.

(d) the Government of India lends to other countries.
117. An increase in CRR by the Reserve Bank of India results
in [UP-PCS 2010]
(a) decrease in debt of the government
(b) reduction in liquidity in the economy
(c) attracting more FDI in the country
(d) more flow of credit to desired sectors
118. Open - market operations of Reserve Bank of India refer
to [UP-PCS 2010]
(a) trading in securities
(b) auctioning of Foreign Exchange
(c) transaction in gold
(d) none of the above
119. Which one of the following is different from the others from the point
of view of ownership? [UP-PCS 2011]
(a) LIC Policy
(b) Bank Fixed Deposit
(c) Kisan Vikas Patra
(d) Debenture of a Company
120. Which one of the following does not implement the Self – Help
Groups (SHGs) - Bank Linkage programme?
[UP-PCS 2015]
(a) NABARD
(b) Commercial Banks
(c) RRBs
(d) Co- operative Banks
121. Bank deposits are insured by DICGS for a maximum amount of
.................. per depositor per bank.
[UBI-PO 2016]
(a) No limit
(b) `5,00,000
(c) `2,00,000
(d) `1,00,000
122. Which of the following company is the sole reinsurance company in
India? [UBI-PO 2016] (a) Life Insurance
Corporation of India
(b) ICICI Prudential Life Insurance Company
(c) National Insurance Company
(d) General Insurance Corporation
123. Who appoints a banking ombudsman? [UBI-PO 2016]
(a) Lead Bank of the State
(b) Governor of respective state
(c) Reserve Bank of India
(d) President of India
124. Who decides the rate of interest on savings bank deposits?
[UBI-PO 2016]
(a) Ministry of Finance
(b) Indian Banks Association
(d) Individual Banks
125. Which of the following public sector banks is the first bank to offer
wealth management service? [UBI-PO 2016]
(a) Bank of India
(b) Bank of Baroda
(c) State Bank of India
(d) Canara Bank
(e) Other than those given as options
126. Yes Bank has announced mobilisation of USD 5 billion towards its
commitment to climate finance in India by 2020. The Bank’s
committed target for funding clean energy is— [NABARD 2016]
(a) 1000 MW annually
(b) 1500 MW annually
(c) 1500 MW by 2020
(d) 5000 MW by 2020
127. The first Land Development Bank was established in 1920. It was
located at— [UP-PCS 2016]
(a) Meerut
(b) Jhang
(c) Munger
(d) Thane
128. Which of the following is the first bank to tie up with Indian railways
to sell rail tickets through its web site?
[Bihar J.Service 2016]
(a) State Bank of India
(b) ICICI Bank
(c) Axis Bank Ltd.
(d) Punjab National Bank
129. Which of the following banks is the World’s largest bank by
assets? [Bihar J.Service 2016]
(a) Bank of America
(b) Industrial and Commercial Bank of China (ICBC)
(c) BNP Paribas
(d) Bank of China
130. Which of the following terms is not associated with banking?
(a) CTS
(b) MICR
(c) IFSC
(d) FERA
131. SLR can be defined as— [UGC-2016]
(a)
(b)
(c)
(d)
132. The banks which are implementing the Micro Finance Programme
linked with Self Help Groups (SHGs) are—
[UGC-2016]
(a) Commercial Banks and Co-operative Banks only
(b) Regional Rural Banks and Commercial Banks, only
(c) Co-operative banks and Regional Rural Banks, only
(d) Commercial Banks, Regional Rural Banks and Co-operative Banks

133. With reference to Asian Development Bank, consider the following
statements— [UGC-2016]
I. United States has the largest pro portion of shares in voting
system.
II. China and India have the same percentage of shares for the
voting system.
Which of the statement(s) given above is/are correct?
Codes :
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
134. The share of the concerned State Government in the capital of
Regional Rural Banks is— [BOM-PO 2016]
(a) 15 per cent
(b) 35 per cent
(c) 20 per cent
(d) 50 per cent
135. The Bandhan Banking Limited is an Indian banking and financial
services company Headquartered in—
[BOM-PO 2016]
(a) Mumbai, Maharashtra
(b) New Delhi, Delhi
(c) Hyderabad, Telangana
(d) Kolkata, West Bengal
136. The baseline ‘Aapka bhala, Sabki bhali’ is associated with
— [BOM-PO 2016]
(a) RBL Bank Limited
(b) DCB Bank Limited
(c) Yes Bank Limited
(d) Bandhan Bank Limited
137. The ‘Indian Bank’ is an Indian state-owned financial service company
Headquartered in— [BOM-PO 2016]
(a) Bengaluru
(b) Mumbai
(c) Chennai
(d) Kolkata
138. The first Indian Bank to introduce ‘Smart Vault’, a fully automated
locker facility using robotic technology to access lockers from the stafe
vault is— [BOM-PO 2016]
(a) IDBI Bank
(b) Federal Bank
(c) HDFC Bank
(d) ICICI Bank
139. According to extant RBI guidelines, ‘Payment Banks’ are not
permitted to— [BOM-PO 2016]
(a) set up branches or ATMs
(b) accept remittances to be sent to multiple banks
(c) distribute mutual fund/insurance/pension products
(d) set up subsidiaries to undertake NBFC activities
140. Which of the following institutions is the umbrella organization for all
retail payment systems in India?
[BOM-PO 2016]
(a) RBI
(b) CCIL
(c) CDSL
(d) NPCI
141. A cheque which has been written by the maker and dated at some point
in the past is known as— [BOM-PO 2016]
(a) Out-of-date cheque
(b) Post-dated cheque
(c) Pre-paid cheque
(d) Antedated cheque
142. ‘SFMS’ is a secure messaging standard developed to serve as a
platform for intra-bank and inter-bank applications. The first letter ‘S’
in the abbreviation ‘SFMS’ stands for—
[BOM-PO 2016]
(a) Structured
(b) Simplified
(c) Standard
(d) Sheltered
143. A currency which either has a missing portion or is composed of more

than two pieces is categorized as a—
[BOM-PO 2016]
(a) Soiled Note
(b) Imperfect Note
(c) Detached Note
(d) Mutilated Note
144. The ‘Interest Rate Risk’ is a type of– [BOM-PO 2016]
(a) Market Risk
(b) Liquidity Risk
(c) Reputational Risk
(d) Operational Risk
145. In case of Small Finance Banks (SFB), the loan size and investment
limit exposure to single— [BOM-PO 2016]
(a) 15 per cent of total advances
(b) 10 per cent of capital funds
(c) 15 per cent of capital funds
(d) 10 per cent of total advances
146. The Depositor Education and Awareness Fund (DEAF) is maintained
with— [BOM-PO 2016]
(b) NABARD
(c) Life Insurance Corporation
(d) State Bank of India
147. The last six characters of the alphanumeric IFSC printed on the cheque
helps in identifying the— [BOM-PO 2016]
(a) Bank branch
(b) Type of account
(c) Bank name
(d) Business or profession
148. The recently launched ‘UPI’ is expected to make sending money easy.
The letter ‘I’ in the abbreviation ‘UPI’ stands for
— [BOM-PO 2016]
(a) Interface
(b) Infrastructure
(c) Institution
(d) International
149. The ‘Mudra Bank’ is a subsidiary of— [BOM-PO 2016]
(a) ICICI
(b) RBI
(c) IFCI
(d) SIDBI
150. A central bank of a country uses Open Market Operations (OMO) as
the primary means of implementing—
[BOM-PO 2016]
(a) Tax policy
(b) Monetary policy
(c) Fiscal policy
(d) Budgetary policy
151. Bank rate means— [BPSC 2017]
(a) Interest rate charged by money lenders
(b) Interest rate charged by Scheduled Banks
(c) Rate of Profit of banking institution
(d) Official rate of interest charged by Central Bank
152. The microfinance institutions (MFI) registered as Non-Banking
Finance Companies (NBFC) are presently regulated by
— [RBI 2016]
(a) SEBI
(b) Reserve Bank of India
(c) MUDRA (SIDBI) Bank
(d) NABARD
153. SBI Life Insurance Limited is a joint venture life insurance company
of State Bank of India (SBI) and— [RBI 2016]
(a) HDFC Life Insurance Company
(b) Life Insurance Corporation of India
(c) BNP Paribas Cardiff
(d) ICICI Prudential Life Insurance Company
154. The alphabet ‘D’ in the abbreviation ‘NDTL’, commonly used in
banking world, stands for— [RBI 2016]
(a) Demand
(b) Debenture
(c) Debt
(d) Deposit
155. SMERA Limited, a popular body in the financial world, is a full
service— [RBI 2016]
(a) Asset Financing Company
(b) Asset Management Company
(c) Credit Information Bureau
(d) Credit Rating Agency
156. ‘MobiKwik’ is the name of a— [RBI 2017]
(a) Mobile wallet and online payment system
(b) Online shopping portal
(c) White Label ATM entity
(d) Brown Label ATM entity
157. The country’s first Aadhaar based ATM is launched by which one of
the following banks? [RBI 2017]
(a) ICICI Bank
(b) SBI
(c) HDFC
(d) DCB Bank
158. Consider the following sentences regarding ‘India Post Payment
bank’—
1. It is third entities that get approval from Reserve Bank of India.
2. It can accept deposits up to 3 lakh per account from individuals.
Which of the above sentence(s) is/are true?
(a) Only 1
(b) Only 2
(c) 1 and 2
159. A currency note which is wholly or partly washed, shrunk, altered or
indecipherable is known as a—
[IDBI 2016- 2017]
(a) Forged banknote
(b) Soiled banknote
(c) Obliterated banknote
(d) Imperfect banknote
160. Which of the following was established in 1928 as the first printing
press for bank notes in India? [IDBI 2016- 2017]
(a) Indian Security Press (ISP), Nasik

(b) Currency Notes Press (CNP), Nasik
(c) Bharatiya Reserve Bank Notes Mudran Private Limited (BRBNMPL),
Mysore
(d) Bharatiya Reserve Bank Notes Mudran Private Limited (BRBNMPL),
Salboni
161. The Indian Life Insurance Company ‘Aviva India’ is a joint venture
between Aviva pic, a British insurance Company and the Indian
conglomerate— [IDBI 2016- 2017]
(a) Tata Group
(b) L and T Group
(c) Dabur Group
(d) TVS Group
162. A third-party administrator (TPA) is an organisation associated with
the claim settlement process in the—
[IDBI 2016- 2017]
(a) Exchange markets
(b) Insurance industry
(c) Commodity market
(d) Mutual fund industry
163. According to the Reserve Bank of India’s guidelines to banks,
customers can change up to 20 pieces of soiled currency notes over the
counter, free of charge upto a maximum value of—
(a) `28,000
(b) `5,000
(c) `25,000
(d) `15,000
164. The ‘Currency Chests’ are store-houses where bank notes and rupee
coins are clocked on behalf of—
[IDBI 2016- 2017]
(a) State Bank of India
(b) Public Sector Banks
(c) Commercial Banks
(d) Reserve Bank of India
165. The Section 2 of ‘The Coinage Act, 2011’ clarifies that the term ‘Coin’
does ‘not’ include— [IDBI 2016- 2017]
(a) Postal order or ‘p-money’ issued by any bank or post office

(b) Commemorative coin issued by Reserve Bank of India
(c) Government of India One Rupee Note
(d) Coins made of any other material stamped by Government
166. The Indian Coins are minted at the four Indian Government Mints,
which of the following is ‘not’ one of them?
[IDBI 2016- 2017]
(a) India Government Mint, Nasik (Maharashtra)
(b) India Government Mint, Hyderabad (Telangana)
(c) India Government Mint, Noida (Uttar Pradesh)
(d) India Government Mint, Kolkata (West Bengal)
167. Consider the following statements: [IAS 2017]
1. National Payments Corporation of India (NPCI) helps in promoting the
financial inclusion in the country.
2. NPCI has launched RuPay, a card payment scheme.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
168. Which of the following is a most likely consequence of implementing
the ‘Unified Payments Interface
(UPI)’? [IAS 2017]
(a) Mobile wallets will not be necessary for online payments.
(b) Digital currency will totally replace the physical currency in about two
decades.
(c) FDI inflows will drastically increase.
(d) Direct transfer of subsidies to poor people will become very effective.
169. Which of the following statements is/are correct regarding the
Monetary Policy Committee (MPC)? [IAS 2017]
1. It decides the RBI’s benchmark interest rates.
2. It is a 12-member body including the Governor of RBI and is
reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.
(a) 1 only
(b) 1 and 2 only

(c) 3 only
(d) 2 and 3 only
170. Which of the following statements best describes the term ‘Scheme for
Sustainable Structuring of Stressed Assets (S4A)’, recently seen in the
news? [IAS 2017]
(a) It is a procedure for considering ecological costs of developmental
schemes formulated by the Government.
(b) It is a scheme of RBI for reworking the financial structure of big
corporate entities facing genuine difficulties.
(c) It is a disinvestment plan of the Government regarding Central Public
Sector Undertakings.
(d) It is an important provision in ‘The Insolvency and Bankruptcy Code’
recently implemented by the Government.
171. What is the purpose of setting up of Small Finance Banks (SFBs) in
India? [IAS 2017]
1. To supply credit to small business units
2. To supply credit to small and marginal farmers
3. To encourage young entrepreneurs to set up business particularly in
rural areas.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
172. Who among the following can join the National Pension System
(NPS)? [IAS 2017]
(a) Resident Indian citizens only
(b) Persons of age from 21 to 55 only
(c) All State Government employees joining the services after the date of
notification by the respective State Governments
(d) All Central Government employees including those of Armed Forces
joining the services on or after 1st April, 2004
Stock exchange & SEBI
173. A firm sells shares worth `1000 direct to individuals. This transaction
will cause
(a) GNP to rise by `1000
(b) GDP to rise by `1000
(c) National income to rise by `1000
(d) No impact on Gross National Product
174. The volatility in the Indian share market is due to
1. inflow and outflow of foreign funds.
2. fluctuations in foreign capital markets.
3. changes in the monetary policy.
Which of the above mentioned causes are correct?
(a) 1 and 2
(b) 1 and 3
(c) 1, 2 and 3
(d) 2 and 3
175. OTCEI is—
(a) Atomic Submarine of China
(b) Economic Policy of USA
(c) An Indian Share Market
(d) A defence research organisation
176. Debenture holders of a company are its
(a) shareholders
(b) creditors
(c) debtors
(d) directors
177. What does S&P 500 relate to
(a) Super computer.
(b) A new technique in e-business.
(c) A new technique in bridge building.
(d) An Index of stocks of large companies.
178. In the parlance of financial investment the term ‘bear’ denotes
(a) An investor who feels that the price of a particular security is going to
fall.
(b) An investor also feels that the price of a particular share is going to rise.
(c) A shareholder or a bankholder who has an interest in a company,
financial or otherwise
(d) Any lender whether by making a loan or buying a bond.

179. Which of the following statements is/ are correct?
[CDS-2012-I]
1. NIFTY is based upon 50 firms in India.
2. NIFTY is governed and regulated by the Reserve Bank of India.
3. NIFTY does not trade in mutual funds.
(a) Only 1
(b) Only 2
(c) Only 3
(d) 1 and 3
180. In the parlance of financial investment, the term bear denotes
[CDS-2012-II]
(a) an investor, who feels that the price of a particular security is going to
fall
(b) an investor, who expects the price of a particular share to rise
(c) a shareholder, who has an interest in a company, financially or
otherwise
(d) any lender, whether by making a loan or buying a bond
181. The traders reduce the risk of loss in currency fluctuations through
which of the following? [UGC-2016]
(a) Speculations
(b) Arbitrage
(c) Hedging
1. (a) Developmental Expenditure - the expenditure which is incurred

on activities directly related to economic development is called
developmental expenditure. Expenditure occurred on education,
health care, scientific research, infrastructure etc.
Non Developmental Expenduture - Expenditure incurred on
general essential services required for normal running of the Govt.
is non developmental expenduture. Expenditure occurred on
service relating to general administration, police, judiciary,
defense is non developmental expenditure.
2. (d) Coal mines is not an example of economic overheads. Economic
overhead is capital investment into the infrastructure which
should encourage new industrial growth and social well being.
The other three School, sanitary facilities and roads and railways
are economic overheads.
Overheads are indirect cost which cannot be traced into any specified
cost objects.
3. (a) All expenditures that promote economic growth and development
are termed as development expenditure. Expenditure on
infrastructure development, public enterprises or development of
agriculture increase productive capacity in the economy and bring
income to the government. Expenditures in the nature of
consumption such as Defence, interest payments, expenditure on
law and order, public administration, do not create any productive
asset which can bring income or returns to the government are
non-development expenditure.
Govt. grant is a financial award given by the federal State local Govt. to
an eligible grantee.
4. (c)
5. (c) Zero-based budgeting is an approach to planning and decision-
making which reverses the working process of traditional
budgeting. In zero-based budgeting, every line item of the budget
must be approved, rather than only changes. During the review
process, no reference is made to the previous level of expenditure.
Regarding zero Base Budgeting (ZBB) existing government
programme can be discarded under ZBB if they are found to be

outdated. Moreover ZBB is difficult to be applied to Human
Development programmes as the outcome of such programmes is
intangible in nature.
6. (d) Austerity describes policies used by governments to reduce
budget deficits during adverse economic conditions. These
policies may include spending cuts, tax increases. This is done in
economic crisis situation to improve the credit rating of the
countries going through adverse economic condition.
7. (a) Government debt is the debt owed by central government.
Government usually borrows by issuing securities, government
bonds, bills through Provident funds etc. However pension
policies are not included in the list.
8. (b) Current account deficit is a measurement of a country’s trade in
which the value of goods and services it imports exceeds the value
of goods and services it exports. Increase in crude oil price and
rise in import of services oil increase the current account deficit.
However increase in exports will reduce the deficit.
9. (d) All these statements are components of internal debt.
10. (a) Deficit financing is a pragmatic tool of economic development
and has been used by Indian govt. to obtain necessary resources to
finance the five year plans.
11. (d) The definition of deficit financing is likely to vary with the
purpose for which such a definition is needed.
In one sense by deficit financing we mean the excess of government
expenditure over its normal receipts raised by taxes, fees, and
other sources. In this definition such expenditure whether
obtained through borrowing or from the banking system measures
the budget deficit. Deficit financing is said to have been used
whenever government expenditure exceeds its receipts.
In under-developed countries deficit financing may be in two forms:
(i) Difference between overall revenue receipts and expenditure
(ii) Deficit financing may be equal to borrowing from the banking system
of the country.
12. (a) Fiscal deficit - Excess of total expenditure over total receipts less
borrowings.
Budget deficit - Excess of total expenditure over total receipts.

Revenue deficit-Excess of total expenditure over revenue receipts.
Primary deficit-Excess of total expenditure over total receipts less
borrowings & Interest payments.
13. (c) Transfer payment is a payment of money to individuals by
government without taking any goods or service.
Examples :
• Unemployment allowance
• Social security payments
• Old age pension
• Student grant
• Subsidies to farmers, exporters & manufacturer.
14. (a) A Sinking Fund is a fund created by the government and
gradually accumulated every year by setting aside a part of
current public revenue in such a way that it would be sufficient to
pay off the funded debt at the time of maturity. Under this method,
the aggregate burden of public debt is least felt, as the burden of
taxing the people to repay the debt is spread evenly over the
period of the accumulation of the fund. The preferable alternative
for the government is to raise a new loan and credit the proceeds
of sinking fund. It is a separate fund established by a government.
15. (b) Deficit Financing is an expansionist device of currency machine
and is accompanied by inflation and has many adverse effects on
the economy. It has also been compared to a drug market in red
‘Poison’ which is prescribed for a certain purpose and has to be
administered in small regulated dose. When the outlay of a
government exceeds its tax revenues, the government budget is
said to be in deficit; government spending in excess of tax receipts
is known as deficit spending. Governments usually issue bonds to
match their deficit.
16. (b) Effective Revenue Deficit is basically revenue deficit excluding
expenditure on capital generation form grants from the Centre to
the states. It signifies the amount of capital receipts that are being
used for actual consumption expenditure of the Government. It is
a new term introduced in the Union Budget 2011-12. It has now
become a new fiscal parameter.
17. (a) The Janta Party coalition government led by Morar Ji Desai
demonetized the currency notes of Rs. 1,000, Rs. 5,000 and Rs.
10,000 on 16 January 1978 to curb counterfeit currency and black
money. The Finance Minister was Haribhai M. Patel at the time.
18. (c) Finance Minister Vishwanath Pratap Singh’s Long Term Fiscal
Policy (LTFP) unveiled in January, 1986.
19. (d) In recommending horizontal distribution, the 14th Finance
Commission has used broad parameters of population (1971) and
changes of population since, income distance, forest cover and
area.
20. (d) Imposition of higher duty on exports is not likely to help in
improving India’s balance of payments position.
21. (c) The Reserve Bank of India (RBI) uses the monetary policy to
manage liquidity or money supply in a manner that balances
inflation and at the same time aids growth. The tools RBI uses to
manage monetary policy are :
1. Repo and Reverse Repo Rate.
2. Cash Reserve Ratio (CRR).
3. Open Market Operations.
4. Statutory Liquidity Ratio.
5. Bank Rate.
22. (b) The first phase of liberalization was initiated in India under the
regime of P.V.Narsimha Rao as a PM and Manmohan Singh as
Finance Minister in 1991.
23. (a) A regressive tax is generally a tax that is applied uniformly. This
means that it hits lower income individuals harder. Regressive tax
imposes a greater burden (relative to resources) on the poor than
on the rich — there is an inverse relationship between the tax rate
and the taxpayer’s ability to pay as measured by assets,
consumption, or income.
24. (a) “Taxation over taxes” or “cascading-effect” of the taxes adds to
the deadweight loss i.e. slump in total surplus of supply chain
consisting of supplier, manufacturer, retailer and consumer. Due
to cascading tax imposition leads to a disproportionate increase in
prices by an extent more than the rise in the tax.
25. (c) Fiscal policy is the use of government revenue collection

(taxation) and expenditure (spending) to influence the economy.
The two main instruments of fiscal policy are changes in the level
and composition of taxation and government spending in various
sectors.
26. (b) Fiscal drag is an economics term referring to a situation where a
government’s net fiscal position (equal to its spending less any
taxation) does not meet the net savings goals of the private
economy. Fiscal drag is a concept where inflation and earnings
growth may push more taxpayers into higher tax bracket.
27. (a) A Pigovian tax is applied to a market activity that is generating
negative externalities (costs for somebody else) like cigarette
consumption, burning of fossil fuel.
28. (d) Basel III is basically a regulatory accord designed specifically for
the banking sector. It aims to improve the supervision, regulation
and risk management within the sector. It also targets at
strengthening the transparency of the banks.
29. (c) A progressive tax is a tax in which the tax rate increases as the
taxable base amount increases Regarding progressive tax,
marginal tax rate should be increasing and it should be more than
average tax rate.
30. (a) The Goods and Services Tax (GST) is a Value Added Tax (VAT)
replacing all indirect taxes levied on goods and services by the
Indian Central and State governments. India is a federal republic,
and the GST is thus implemented concurrently by the central and
state governments as the Central GST and the State GST
respectively. Exports will be zero-rated and imports will be levied
the same taxes as domestic goods and services adhering to the
destination principle.
31. (d) The Minimum Alternative Tax (MAT) was introduced for the first
time in the Budget for the year 1996-97. Minimum alternate tax or
MAT is a tax levied on firms/ companies or limited liability
partnership (LLPs) making abundant profits as well as distributing
dividend to its shareholders who leveraging on the features of the
Indian Taxation system do not contribute towards the
government’s taxation kitty. Thus, for such corporates a minimal
tax amounting to some fixed percentage of book profits i.e. profits

according to accounting records is charged as minimal alternative
tax (MAT).
32. (b) Government of India is disinvesting its share from public sector
undertakings. Most of government undertakings were incurring
losses during the pre liberalization period. Hence, after the
introduction of new economic policy in 1991, government started
downsizing its share in PSU. But the process of disinvestment is
very slow due to host of legal and political hurdles.
33. (a) Permanent Account Number (PAN)card is unique alphanumeric
combination. It is issued by the Indian Income Tax Department. It
serves as an important ID proof, date of birth proof and proof of
tax payer. However it can’t be used for the purpose of address
proof, as address is not mentioned on PAN card.
34. (d) Agricultural income tax to states in India is assigned by the
Constitution of India. The agency responsible for it is Finance
Commission whose function is distribution of net proceeds of
taxes between Centre and the States, to be divided as per their
respective contributions to the taxes.
Finance commission: It is mainly to give its recommendation on
distribution of tax revenues between the union & the states and
amongst the states themselves.
Interstate council : It is established to facilitate co-ordination of policies
and their implementation between the Union & the state govt.
IFC : It’s main objective is to faster a measurable increase in the
availability of agriculture finance in IFC’s client portfolio
globally.
35. (d) Bihar is the first state to impose agricultural income tax in India.
Agricultural income tax is levied on the income from Agriculture.
At present agriculture is subjected to two direct taxes and they are
Agricultural Income tax and Land Tax.
Agricultural Income tax treatment : It is characterised as a valid source
of income from sources that comprise Agriculture land, buildings
on or related to Agricultural land card commercial produce from
an Agriculture land.
36. (d) Agricultural income tax is levied on the income from Agriculture.
At present agriculture is subjected to – two direct taxes and they
are Agricultural Income Tax and Land Tax. They are levied by the
state governments. Not all states levy agricultural income tax.
37. (b) The Government of India earns maximum revenue from Union
Excise Duty which is indirect tax levied and collected on the
goods manufactured in India and consumed within the country.
Custom Duty : It is a variation of Indirect tax and is applicable
on all goods imported and a few Goods exported out of the
country.
Corporation tax : It is a direct tax imposed by jurisdiction on the
income or capital of Income.
38. (a) Laffer curve is a representation of the relationship between
possible rates of taxation and the resulting levels of government
revenue. It illustrates the concept of taxable income elasticity-i.e.,
taxable income will change in response to changes in the rate of
taxation.
Phillips Curve a supposed inverse relationship between the level
of unemployment and the rate of inflation.
39. (a) Roughly 80% comes from the individual income tax and the
payroll taxes that fund social insurance programme. Another 11%
comes from corporate income tax and the rest is a form of a mix
course.
40. (b) Income Tax (1860); Expenditure Tax (1956); Value Added Tax
(1996-97) Fringe Benefits Tax (2005).
41. (c) A progressive tax receives a larger percentage from the income of
higher earners than it acts from low income person.
42. (b) Corporation tax in India is the major source of Gross Tax Revenue
(GTR) for the Government of India. It provides higher tax
collection in comparison to income tax, custom duty and service
tax.
43. (c) The Department of Economic Affairs (DEA) under Ministry of
Finance is the nodal agency of the Union Government to
formulate and monitor country’s economic policies and
programmes having a bearing on domestic and international
aspects of economic management.
44. (c) The government influences private sector expenditure by taxation,

subsidies and macro-economic policies.
45. (a) Corporation Tax, Wealth Tax and Income Tax are in the category
of direct tax.
46. (a) The sharp decline in crude oil price helped the government to
deregulate the price of diesel and thus reduce a huge burden of
subsidy on the exchequer. India if not a producing giant, is
certainly a refining hub where it refines and markets around 220
metric million tonnes of petroleum products. Out of this around
160 mmt is used for domestic consumption while the rest is used
for exports. Therefore, the drop in price of oil will be a blessing
for the Indian refineries and the oil marketing companies.
47. (b) Corporation Tax is imposed by Central Government.
48. (d) Generally, the income of a company falls under any of the
following 4 heads of income:
(1) Profits or gains from the business
(2) Income from property, whether it is housing, commercial, self-occupied
or let-out. If the property is used in the company’s business
operations, it does not fall under this head.
(3) Capital gains
(4) Income from other sources including winnings from lotteries, races and
interest on securities.
49. (d) Motor Vehicle tax is not a source of tax revenue for the Central
Government in India. It is type of revenue part of State tax.
50. (b) KK Surcharge is the additional percentage of tax which domestic
tax players need to pay when declaring undisclosed income by
paying tax at 30%. The KKS above the tax is 7.5%.
51. (b) Suggestion for the imposition of expenditure tax in India for the
first time was given by Kaldor on 1956.
52. (b) MODVAT e.g. modified value added tax is related to Value added
tax e.g. VAT.
53. (d) Toll Taxes is one the main Sources of revenue for State
Governments. It is not levied by Govt. of India.
54. (d) The Income Tax department has launched a special electronic
grievance redressal system called ‘e–nivaran’ in order to fast track
taxpayer grievances and ensure early resolution of their

complaints.
55. (a) As per union budget 2016-17, the share of taxes in one rupee.
Corporation tax : 19 Paise
Income tax : 14 Paise
Service tax : 9 Paise
Union Excise Duty : 12 Paise
56. (c) The price-elasticity of demand for a good also depends on the
proportion of their income the buyers spend on the good.
Therefore, if the sales tax on a commodity is raised, but the
revenue earned through its sale decrease sharply, the price
elasticity of demand for the commodity would be high.
57. (a) Customs duties-Export duty and import duty are levied by Central
Government.
58. (a) As mention in article 268 of Indian Constitution, Stamp Duties
are mentioned in the Union List shall be levied by the
Government of India but collected and appropriated by the States.
59. (a) Exports will become ZERO RATED under GST, so statements 2
and 3 would have been correct If examiner had used moderate
words “GST will help”. But he has used ‘extreme’ words. GST is
unlikely to ‘drastically’ reduce CAD Because of crude oil import
and OPEC cartel that manipulates its prices. Similarly, GST is
unlikely to enormously increase size of oureconomy (IMF
projection ~1-1.5% addition in growth rate.) and we can’t
overtake China in near future, because unlike China we are
keeping our currency undervalued against dollar. Hence statement
2 and 3 are wrong. We are left with Answer A.
60. (b) Act provides is an appellate tribunal, and they’re required to
finish case within one year. So #3 is wrong, by elimination, we are
left with A and B. So, B is most appropriate because IT dept
(=therefore Government) can seize the benami properties.
61. (d) From the official Economic Survey 2014-15, we get following
data If we go only by the strict interpretation of above graph then
answer should be “D”
62. (b) The responsibility for coinage lies with central government on the
basis of the Coinage Act, 1906. The designing and minting of
coins in various denominations is decided by Central government.
Except one rupee note & coin all the currencies are minted by RBI. In
one rupee note, RIB signature of RBI Governor of currency held
in 4 places-
Hydrabad, Mumbai, Kolkata & Noida.
63. (d) Devaluation leads to a country’s exports to become less expensive
as the currency is deliberately adjusted down to other currencies,
making imports more expensive, making domestic consumers less
likely to purchase them thus the domestic companies are
encouraged to substitute imports.
64. (d) All the above given terms are not a financial term. RTGS (Real
Time Gross Settlement) is fund transfer system, core banking
solutions like treasury and investment are all processes not
financial term.
65. (d) Money laundering occurs in three steps: the first step involves
introducing cash into the financial system by some means called
as placement; the second involves carrying out complex financial
transactions to camouflage the illegal source called layering; and
the final step entails acquiring wealth generated from the
transactions of the illicit funds called as integration.
Money Laundering - It is the process of transforing the profits of
crime and corruption into obstensibliy Legitimate assets.
66. (c) India switched over to decimal currency in 1957 with the
amendment of the Indian Coinage Act. The rupee remained
unchanged in value and nomenclature. It, however, was now
divided into 100 ‘Paisa’ instead of 16 Annas.
67. (b) In 1991, India faced a serious balance of payment crisis and was
forced to sharply devalue its currency. The country was in the grip
of high inflation, low growth and the foreign reserves were not
even worth to meet three weeks of imports.
Under these situations, the currency was devalued to 17.90 against a
dollar.
In July of 1991 the Indian Government devalued the rupees by between
18 and 19%. The Government also changed its trade policy higher
restrictive to a system of tradable EXIM SCRIPS.

68. (a) The one rupee note is issued by Ministry of Finance and it bears
the signature of Finance Secretary, while other notes bear the
signature of Governor RBI. However, only RBI is the only source
of legal tender money because distribution of one rupee notes and
coins and small coins all over the country is undertaken by the
Reserve Bank as agent of the Government.
69. (d) The rise in interest rates results in increasing cost of borrowing so
lending decreases because businesses do not borrow at high cost.
Moreover it results in increase in cost of production as the cost for
all suppliers of raw material increases due to increase in their
borrowing cost. For individuals the savings increase as they start
saving in lieu for higher return as interest. Higher rates of interest
result in decrease in return on capital as cost of investment in
capital increases.
70. (a) Higher interest rates in low inflation means higher real returns not
just on money, but on all other assets too. These higher real
returns increases the allocation of investment by people.
71. (b)
72. (a)
73. (b)
74. (b) Indira Vikas Patra was a small scale deposit scheme operated by
the post offices all over the country to encourage the idea of
investment in the minds of the lower-middle class people. NSC,
National Saving Scheme and PPF all grant tax rebate.
75. (c) A reserve currency (or anchor currency) is a currency that is held
in significant quantities by governments and institutions as part of
their foreign exchange reserves, and that is commonly used in
international transactions for commodities like oil and gold.
Persons who live in a country that issues a reserve currency can
purchase imports and borrow across borders more cheaply than
persons in other nations because they need not exchange their
currency to do so.
76. (c) At present, index is being developed only for residential housing
sector. However, at a later stage, the index could be expanded to
develop separate indices for commercial property and land.
Primary data on housing prices is being collected from real estate

agents by commissioning the services of private
consultancy/research organisations of national repute. In addition,
data on housing prices is also being collected from the housing
finance companies and banks, which is based on housing loans
contracted by these institutions.
77. (c) Financial inclusion or inclusive financing is the delivery of
financial services at affordable costs to sections of disadvantaged
and low-income segments of society. For financial inclusion
‘Know your customer’ (KYC) norms should be relaxed and no
frills account should be opened for low income segments which
are looking for basic banking only. Along with general purpose
credit cards should be issued and bank branches should be opened
in unbanked rural areas.
78. (c) Devaluation is a deliberate downward adjustment to the value of a
currencies. Since it is relative to other currency so internal price
remains unchanged. It causes a country’s exports to become less
expensive and imports more expensive.
79. (d) A liquidity trap is a situation in which injections of cash into the
private banking system by a central bank fail to lower interest
rates and hence fail to stimulate economic growth. A liquidity trap
is caused when people hoard cash because they expect interest to
rise in future ,an adverse event such as deflation, insufficient
aggregate demand, or war.
80. (d) Currency notes and coins are called fiat money. They don’t have
intrinsic value like a gold or silver coin. The currency-deposit
ratio measures the relationship between the cash people have on
hand and what they have in their accounts.
81. (b) By buying the government securities from the banks and reducing
SLR may inject money into the system. However Raising cash
Reserve Ratio may take away liquidity from the market as the
banks will have to deposit more money with the RBI and
similarly entering the reverse repo operations may also take away
liquidity from the market.
82. (a) Micro-credit extended by banks to individuals is reckoned as a

part of their priority sector lending and no particular model has
been prescribed for micro-finance and banks have been extended
freedom to formulate their own models.
83. (a) Devaluation happens in countries with a fixed exchange rate. In a
fixed-rate economy, the government decides what its currency
should be worth compared with that of other countries. The
exchange rate can change only when the government decides to
change it. If a government decides to make its currency less
valuable, the change is called devaluation. Depreciation happens
in countries with a floating exchange rate. A floating exchange
rate means that the global investment market determines the value
of a country’s currency.
84. (a) Marginal Standing Facility (MSF) is the rate at which scheduled
banks could borrow funds overnight from the Reserve Bank of
India (RBI) against approved government securities. Banks can
borrow funds through MSF during acute cash shortage
(considerable shortfall of liquidity). This measure has been
introduced by RBI to regulate short-term asset liability mismatch
more effectively and the borrowing is within Statutory liquidity
requirements. The Marginal Standing Facility (MSF) is pegged
100bps or 1 % above the Repo Rate.
85. (d) Basel III is basically a regulatory accord designed specifically for
the banking sector. It aims to improve the supervision, regulation
and risk management within the sector. It also targets at
strengthening the transparency of the banks.
86. (b) Financial inclusion is the delivery of financial services, at
affordable costs, to sections of disadvantaged and low income
segments of society.It includes opening educational centres,
opening wealth management centres by Citibank etc. Khan
commission had put forward its report on financial inclusion.
87. (c) Basis points: It is the increase in interest rates in percentage
terms.
— Repo rate: Repo rate is the policy rate and is part of RBI’s Liquidity
Adjustment Facility (LAF). It is the rate at which commercial
banks borrow from the RBI by selling their securities or financial

assets to the RBI for a short-period of time.
— Reverse repo rate: Reverse Repo Rate is also a part of LAF. It is the
rate of interest at which the central bank borrows funds from
commercial banks for a short duration.
— Cash reserve ratio: CRR is the minimum percentage of cash deposits
that banks must keep with the central bank.
88. (c) NABARD doesn’t give “direct” credit assistance. It provides
credit via intermediaries such as micro finance companies, co-
operative society, RRB. Therefore, 2 is false.
89. (b) Open market operation: When RBI buys/sells securities in open
market, in case of OMO, first party permanently sells the
Government security to second party. Second party is free to do
whatever it wants with that security.
90. (c) It will remain the same, because banks do not increase the
national income. So it remains the same immaterial whether banks
are there or not.
91. (d) Currency is most liquid, because you can use it as and when you
want. Time deposit with bank (e.g. fixed deposit), are least liquid
compared to savings/demand deposit with banks and currency.
92. (b) Because Reserve requirements are designed as “precautionary
measures” and not to stop banks from “excessive” profit.
93. (c) Through assistance of Swiss agency for Development & co-
operation, NABARD setup the Rural innovation fund. RIDF is
another noted scheme for the bank for rural development. Under
the RIDF scheme ` 51,283 crore have been sanctioned for
2,44,651 projects covering irrigation, rural roads and bridges,
health & education, soil conservation, water schemes etc.
94. (d) The head office of the National Bank for Agriculture and Rural
Development (NABARD) is located in Mumbai. It helps farmers
access timely and adequate credit.
Current Chairman - Dr. Harsh Kumar Bhanwala
95. (d) These all provide finance under various schemes run by central
government and state governments to purchase seeds, fertilizer,
pesticides etc.
96. (c) It was established on 12 July, 1982 in sixth five year plan by a
special act by the parliament and its main focus was to uplift rural
India by increasing the credit flow for elevation of agriculture &
rural non farm sector.
97. (a) In India, commercial banks have the highest share in the
disbursement of credit to agriculture and allied activities. The
commercial banks disburse around 60% credit followed by
cooperative banks around 30% .
98. (a) Cooperative Banks operate on no profit no loss basis, and they
operate in all sectors including agriculture sector. NABARD is not
a Cooperative Bank. National Bank for Agriculture and Rural
Development (NABARD) is an apex development bank in India.
99. (c) National Bank for Agriculture and Rural Development
(NABARD) is an apex development bank in India. It was
established on 12 July, 1982 in sixth five year plan and its main
focus was to uplift rural India by increasing the credit flow for
elevation of agriculture and rural non-farm sector and laying
down policies and to oversee the operations of the RRBs.
Moreover Regional Rural Banks grant direct loans and advances
to marginal farmers and rural artisans. So both statements are
correct.
100. (b) In India, ‘Report on Currency and Finance’ is the annual
publication of Reserve Bank of India.The report highlights the
evaluation or devaluation of Rupee as a currency along with it
other aspects and projects the financial condition of the economy.
SEBI : Regulator for the security market in India. Headquarters
(Mumbai)
Finance commission : formed to define financial relation
between the center and state.
Headquarters : New Delhi
Finance Ministry : An important ministry their the Govt. of India
concerned with the economy of India.
101. (d) The general superintendence and direction of the RBI is entrusted
with the 21-member- Central Board of Directors—the Governor
(currently Dr. Urjit R. Patel, four Deputy Governors, two Finance
Ministry representatives, ten government-nominated directors to
represent important elements from India’s economy, and four

directors to represent local boards headquartered at Mumbai,
Kolkata, Chennai and New Delhi.
102. (d) V.K. Sharma is the new Chairman of Life Insurance Corporation
of India.
LIC : Largest insurance company in India, HQ :
103. (c) 1st July is celebrated as the establishment date of State Bank of
India. On 1 July 1955, the Imperial Bank of India became the
State Bank of India. SBI is a multinational banking and financial
services company based in India. It is a government-owned
corporation with its headquarters in Mumbai.
SBI : Indian Multinational public sector banking and financial
services company.
Chairperson : Rajnish Kumar.
104. (a) IDBI Bank is an Indian government-owned financial service
company, formerly known as Industrial Development Bank of
India, headquartered in Mumbai, India.
IFCI : (Industrial finance corporation of India): It is an Indian
government owned development bank to calter to the long term
finance needs of industrial sectors.
ICICI: It is an Indian multinational banking & financial services
company headquartered in Mumbai.
105. (c) 72% was British investment in India, when RBI first census of
India’s foreign Assets & Liabilites as on 30 June 1948 revealed
total business investment of `302 crore.
106. (b) Small Industries Development Bank of India is a non-independent
financial institution aimed to aid the growth and development of
micro, small and medium-scale enterprises. It was incorporated
initially as a wholly owned subsidiary of Industrial Development
Bank of India. SIDBI has taken over the responsibility of
administering small industry development fund managed by the
IDBI.
107. (a) Teaser loans are considered an aspect of subprime lending, as they
are usually offered to low-income home buyers. Unfortunately,
these borrowers with increased monthly payments, at times can’t
afford.
108. (d) Near Money is a term used in economics to describe highly liquid
assets that can easily be converted into cash.
109. (a) A flexible exchange rate system is a kind of a monetary system
which allows the exchange rate to be regulated by supply and
demand in relation to other currencies.
110. (b) Syndicate Bank. The symbol of dog implies that Bank is
trustworthy and a friend. Its slogan is : Faithful Friendly.
111. (c) SLR used by bankers indicates the minimum percentage of
deposits that the banks have to maintain in the form of gold, cash
or other approved government securities.
112. (a) The main functioning of the banking system is to accept deposits
and provide credit. The bank collects deposits from public. These
are savings, fixed, current and recurring deposits. The bank
advances loan to the business community and other members of
the public. The types of bank loans and advances are overdraft,
cash credits, loans and discounting of bill of exchange.
113. (d) The variation in the value of money is always accompanied by
opposite variation in the price of commodities and services. In
brief, the value of money varies inversely with the price level. It is
reciprocal of price level.
Vm =1/p (where Vm denotes value of money and p stands for price
level).
114. (b) The word ‘Actuaries’ is related to the profession of insurance. The
determination of the accidents covered by Insurance policy and of
the premium is done by actuaries.
115. (c) According to Indian Reserve Bank. Non performing assets in
commercial bank means the loans in which interest or principal
amount is not recovered.
116. (c) Bank rate is that rate at which RBI gives credit to Commercial
Banks.
117. (b) The Cash Reserve Ratio is the amount of funds that the banks are
bound to keep with Reserve bank of India as a portion of their Net
Demand and Time Liabilities (NDTL). When RBI increases the
CRR, less funds are available with banks as they have to keep
larger portions of their cash in hand with RBI. This means that
banks will now have less money to play with. This resulted
reduction in liquidity in the economy.
118. (a) Open Market Operations refer to the purchase and sale of the
Government securities (trading of the securities) by RBI from / to
market. The objective of Open Market Operations is to adjust the
rupee liquidity conditions in the economy on a durable basis.
119. (d) A debenture is a type of debt instrument that is not secured by
physical assets or collateral. Both corporations and governments
frequently issue this type of bond to secure capital.
120. (a) The Self-Help Group-Bank Linkage Programme (SBLP), which
was started as a pilot programme in 1992 on the basis of
recommendation of S K Kalia Committee. Commercial banks,
co-operative banks and the regional rural banks have been
actively participating in the SBLP. NABARD does not implement
the SBLP.
121. (d) Each depositor in a bank is insured upto a maximum of `1,00,000
(Rupees One Lakh) for both principal and interest amount held by
him in the same capacity and same right as on the date on
liquidation/cancellation of bank’s licence or the date on which the
scheme of amalgamation/merger/reconstruction comes into force.
122. (d) GIC of India (GIC) is the sole reinsurance company in the Indian
insurance market with over four decades of experience.
123. (c) The Banking Ombudsman is a senior official appointed by the
Reserve Bank of India to redress customer complaints against
deficiency in certain banking services.
124. (d) RBI Gives power to Banks to decide saving banks deposit interest
rates.
125. (c) State Bank of India became the first public sector lender to launch
wealth management service, a space dominated by private and
foreign players, to cater to fast-growing affluent segment of the
country.
126. (d) YES BANK, a leader in the climate finance space in the country,
investing and raising capital towards mitigation, adaptation and
resilience. This bank has the target funding of 5,000 MW of clean
energy by 2020.
127. (b) The first land development bank was started at Jhang in Punjab in
1920.
128. (b) ICICI Bank has tied up with railway’s e-ticketing
platform IRCTC to sell rail tickets through its website.
129. (b) Industrial and Commercial Bank of China is the Largest Banks in
the World with total assets of 3616.39 billion USD.
130. (d) CTS : Cheque Truncation System Cheque,
MICR : Magnetic Ink Character Recognition,
IFSC : Indian Financial System Code
FERA : Foreign Exchange Regulation Act.
131. (c) The ratio of liquid assets to net demand and time liability is called
statutory Liquidity Ratio (SLR).
SLR Rate =
132. (d) Commercial Banks, Regional Rural Banks and Co-operative

Banks are implementing the Micro Finance programme linked
with Self Help Groups.
133. (d) Largest Shareholdings—
Japan (15.6%)
US (15.5%)
China (6.5%)
India (6.3%)
134. (a) In the regional rural banks, 50% share shall be held by the central
government, 15% by the concerned state government and 35% by
the sponsor bank.
135. (d) Bandhan Bank was incorporated on 23 December 2014 as a
wholly owned subsidiary of Bandhan Financial Holdings with its
headquarters at Kolkata, West Bengal, India.
136. (d) The baseline “Aapka bhala, Sabki bhalai” is associated with
Bandhan Bank limited.
137. (c) Indian Bank is an Indian state-owned financial services company
established in 1907 and headquartered in Chennai, India.
138. (d) ICICI, the first Indian bank has launched “Smart Vault” a fully
automated locker facility using robotic technology to access
lockers (available 24x7, including weekends and after banking

hours.) from state vault.
139. (d) According to extant RBI guidelines, Payment Banks are not
permitted to set up subsidiaries to undertake NBFC activities.
140. (d) National Payments Corporation of India (NPCI) is an umbrella
organization for all retail payments in India.
141. (d) In banking, antedated refers to cheques which have been written
by the drawer, and dated at some point in the past.
142. (a) SFMS stands for Structured Financial Messaging System.
143. (d) Mutilated banknote is a banknote, of which a portion is missing or
which is composed of more than two pieces.
144. (a) There are four major types of market risk; Interest Rate Risk,
Equity Price Risk, Foreign Exchange Risk, Commodity Price
Risk.
145. (b) The maximum loan size and investment limit exposure to a single
and group obligor would be restricted to 10 per cent and 15 per
cent of its capital funds, respectively.
146. (a) Reserve Bank has established a Fund to be called the Depositor
Education and Awareness Fund (DEAF) referred to in Section
26A of the Act.
147. (a) The IFSC is an 11-character code with the first
four alphabetic characters representing the bank name, and the
last six characters (usually numeric, but can be alphabetic)
representing the branch.
148. (a) A Unified Payment Interface (UPI) is a single window mobile
payment system launched by the National Payments Corporation
of India (NPCI). The letter “I” in the abbreviation UPI stands for
interface.
149. (d) The Mudra Bank is subsidiary of Small industrial development
bank of India (SIDBI).
150. (b) A central bank uses OMO as the primary means of
implementing monetary policy.
151. (d) Bank rate is the rate charged by the central bank for lending funds
to commercial banks.
152. (b) Microfinance Institutions (MFIs) regulated by the Reserve Bank
of India (RBI).
153. (c) SBI Life Insurance is a joint venture life insurance company
between State Bank of India (SBI), and BNP Paribas Cardif.
154. (a) The abbreviation of Net Demand and Time Liabilities is NDTL,
in which ‘D’ stands for demand.
155. (d) SMERA Ratings Limited is a full service Credit Rating Agency,
registered with SEBI, and accredited by RBI as an External Credit
Assessment Institution, for Bank Loan Ratings under BASEL-II
norms.
156. (a) MobiKwik is an Indian company founded in 2009 that provides a
mobile phone based payment system and digital wallet.
157. (d) DCB Bank, launched a “card-less and PIN-less” ATM in
Bengaluru, in June, 2017. The ATM accepts Aadhaar number and
Aadhaar fingerprint (biometric) instead of ATM / debit card and
PIN to dispense cash from the bank account.
158. (a) India Post Payments Bank is the third entity to receive payments
bank permit after Airtel and Paytm.
159. (d) Imperfect banknote means any banknote, which is wholly or
partially, obliterated, shrunk, washed, altered or indecipherable
but does not include a mutilated banknote.
160. (b) Currency Note Press (CNP), Nasik, Maharashtra was established
in 1928. It was the first printing press for bank notes in India.
161. (c) Aviva India is an Indian life assurance company, and a joint
venture between Aviva plc, a British assurance company,
and Dabur Group, an Indian conglomerate.
162. (b) A Third Party Administrator (TPA) is an Insurance Regulatory
Development Authority (IRDA) registered company or an
organization that processes insurance claims on behalf of
insurance companies.
163. (b) According to the RBI’s guidelines to banks, a person can change
up to 20 pieces of notes with a maximum value of Rs.5000 per
day, banks should exchange them over the counter, free of charge.
164. (d) Currency chests are usually located at authorized select branches
of scheduled banks. These currency chests are store
houses of bank notes and rupee coins and are usually established
with important branches of Scheduled Commercial Banks. They
do their function on behalf of the Reserve Bank.
165. (a) According to the Section 2 of the Coinage Act, 2011, a “Coin”
does not include the credit card, debit card, postal order and e-
money issued by any bank, post office or financial institution.
166. (a) The Government of India has the sole right to mint coins. Coins
are minted at the four India Government Mints at Mumbai,
Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad)
and Noida (UP).
167. (c) NPCI is a not-for-profit company formed by various banks, with
primary objective of providing cost-effective payment solutions to
the banks. NPCi’s solutions such as IMPS, BHIM, RuPay, AEPS
etc. have indeed helped in financial inclusion. So first is correct.
And second is correct- NPCi launched Rupay card in 2012, as 7th
payment gateway in the world.
168. (a) “A” is the most appropriate choice. Mobile wallets will not be
necessary, because your mobile number is directly linked with the
bank account using bank’s ‘customized app’ which is built on the
UPI platform.
169. (a) MPC has 6 members, not 12; and it’s headed by RBI governor
and not Finance Minister. So statement 2 and 3 are wrong, hence
by elimination, we reach answer (a) only 1 correct.
170. (b) S4A is RBI’s scheme for restructuring of corporate loans, hence
“B” is the most appropriate among the given options.
171. (a) While directly or indirectly all three will be encouraged because
of Small Finance banks. But when RBI invited applications, the
specific purpose were 1 and 2 only.
172. (c) NPS was compulsory for new central govt recruits (except armed
forces) WEF 1/1/2004. so “D” is wrong. Any Indian between 18
to 55 can join NPS. So “B” is wrong. NRIs are allowed to open
NPS account as per PFRDA norms.
173. (d) A firm sells shares worth ` 1000 direct to individuals. This
transaction will cause no impact on Gross National Product as
GNP measures the output generated by a country’s enterprises
(whether physically located domestically or abroad) but here no
output is generated.
174. (c)
175. (c) OTCEI was incorporated in 1990 as a Section 25 company under

the Companies Act 1956 and is recognized as a stock exchange
under Section 4 of the Securities Contracts Regulation Act, 1956.
The Exchange was set up to aid enterprising promoters in raising
finance for new projects in a cost-effective manner and to provide
investors with a transparent & efficient mode of trading.
OTCEI (over the counter exchange of India) is based in Mumbai. It is
India’s first exchange for small companies as well as first screen
based nationwide stock exchange in India.
Founded : 1990 Chairman: S.C. Bhargava
176. (b) A person having the debentures is called debenture holder
whereas a person holding the shares is called shareholder. A
shareholder subscribes to the shares of a company. Shares are the
parts of share capital. On the other hand, debenture-holders are
the subscribers to debentures. Debentures are part of loan. A
shareholder or member is the joint owner of a company; but a
debenture holder is only a creditor of the company.
177. (d) S & P 500 relates to an index of stocks of large companies. It
stands for Standard & Poor’s 500 index and is an indicator of the
equities of the United States and one of the most common
benchmarks for its stock market.
178. (a) A bull investor wishing to invest thinks the market or the
company he/she’s investing in is going to be better. A bear
investor is pessimistic about the market and many make more
conservative stock choices.
179. (d) NIFTY is an Index computed from performance of top stocks
from different sectors listed on NSE (National stock exchange).
NIFTY consists of 50 companies from 24 different sectors. Indian
Capital Markets are regulated and monitored by the Ministry of
Finance, The Securities and Exchange Board of India (SEBI) and
The Reserve Bank of India. It does not trade in mutual funds.
180. (a) The term bear denotes an investor who believes that a particular
security or market is headed downward. Bears attempt to profit
from a decline in prices. Bears are generally pessimistic about the
state of a given market. Bearish sentiment can be applied to all
types of markets including commodity markets, stock markets and

the bond market.
181. (c) An investor may reduce the risk of loss from fluctuations in
exchange rates by hedging with currency futures. Simply stated,
hedging involves taking on one risk to offset another.
National Income & Human Development Index

1. The term mixed economy denoted existence of both
(a) rural and urban sector
(b) private and public sector
(c) heavy and small industry
(d) developed and under developed sector
2. It will be true to classify India as
(a) a food-deficit economy
(b) a labour-surplus economy
(c) a trade-surplus economy
(d) a capital-surplus economy
3. The Indian economy is characterised by
(a) pre-dominance of agriculture
(b) low per capita income
(c) massive unemployment
4. 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
5. Who coined the term ‘Hindu rate of growth’ for Indian economy?
(a) A.K. Sen
(b) Kirit S. Parikh
(c) Raj Krishna
(d) Montek Singh Ahluwalia
6. GDP at factor cost is
(a) GDP minus indirect taxes plus subsidies
(b) GNP minus depreciation allowances
(c) NNP plus depreciation allowances
(d) GDP minus subsidies plus indirect taxes
7. Per capita income is obtained by dividing national income by

(a) total population of the country
(b) total working population
(c) area of the country
(d) volume of the capital used
8. GDP is defined as the value of all
(a) goods produced in an economy in a year
(b) goods and services in an economy in a year
(c) final goods produced in an economy in a year
(d) final goods and services produced in an economy in a year.
9. Depreciation is equal to
(a) GNP – NNP
(b) NNP – GNP
(c) GNP – Personal Income
(d) Personal Income – Personal Taxes
10. Which one of the following is not a method of measurement of National
income?
(a) Value Added Method
(b) Income Method
(c) Expenditure Method
(d) Investment Method
11. Net National Product (NNP) of a country is
(a) GDP minus depreciation allowances
(b) GDP plus net income from abroad
(c) GNP minus net income from abroad
(d) GNP minus depreciation allowances
12. National income is based on the
(a) total revenue of the state
(b) production of goods and services
(c) net profit earned and expenditure made by the state.
(d) the sum of all factors of income
13. Which of the following is definitely a major indication of the state of the
economy of a country?
(a) Rate of GDP growth
(b) Rate of inflation
(c) Number of banks in a country
(d) None of these
14. In terms of economics, the total value of the output (goods and services)
produced and income received in a year by a domestic resident of a country put
together is called
(a) Net National Product

(b) Gross National Product
(c) Gross National Income
(d) National income
15. Which of the following is equivalent to National income?
(a) GDP at market price
(b) NDP at factor cost
(c) NNP at market price
(d) NNP at factor cost
16. Which sector of the Indian economy contributes largest to the GDP?
(a) Primary sector
(b) Secondary sector
(c) Tertiary sector
(d) Public sector
17. National Income estimates in India are prepared by
(a) Planning Commission
(b) Reserve Bank of India
(c) Central Statistical Organisation
(d) Indian Statistical Institute
18. The main source of National income in India is
(a) service sector
(b) agriculture
(c) industrial sector
(d) trade sector
19. Who estimated national income in India first?
(a) Dadabhai Naoroji
(b) R.C. Dutt
(c) V.K. R.V. Rao
(d) D.R. Gadgil
20. The National Income of a country is
(a) the annual revenue of the government
(b) sum total of factor incomes
(c) surplus of PSU’S
(d) export minus import
21. The most appropriate measure of a country’s economic growth is its
(a) Gross Domestic Product
(b) Net Domestic Product
(c) Net National Product
(d) Per capita real income
22. The existence of a parallel economy or black money
(a) makes the economy more competitive

(b) makes the monetary policies less effective
(c) ensure a better distribution of income and wealth
(d) ensure increasing productive investment
23. The philosophy of ‘Laissez-Faire’ is associated with
(a) Gandhian state
(b) Industrial state
(c) Socialist state
(d) Welfare state
24. In free economy, inequalities in income is due to
(a) free competition
(b) private property and inheritance
(c) differences in the marginal productivity of labour
(d) private property only
25. Personal disposable income means?
(a) Personal income- direct taxes
(b) Personal income- indirect taxes + fees+ fines
(c) Personal income- indirect taxes + fees+ fines+ social security contribution by
employers
(d) None of these
26. Among Indian economists, who had done pioneering work on National Income?
(a) P. N Dhar
(b) Prof. Shenoi
(c) V. K. R. V Rao
(d) Jagdish Bhagwati
27. One of the problems in calculating the national income in India currently is
(a) under-employment
(b) inflation
(c) non-monetised consumption
(d) low savings
28. Why is demographic dividend likely to be manifested in India in future?
(a) Population in the age group between 8-15 years is likely to increase.
(b) Population of children below 7 years is likely to increase
(c) Population in the age group of 15-64 years is likely to increase
(d) opulation in the age group above 65 years is likely to increase
29. Which one of the following is not a feature of India’s economic planning?
(a) imperative planning
(b) limited centralisation
(c) democratic socialism
(d) indicative planning
30. What does the term ‘Green shoots’ represent in an Economy?

(a) signs of growth of agriculture sector in a growing economy
(b) signs of economic recovery during an economy downturn
(c) signs of growth of agriculture sector in a declining economy
(d) signs of economic decline in a developed economy.
31. Consider the following statements in regard to inclusive development:
(1) Inclusive developments refer to the social inclusion of the socially excluded
sections of the society.
(2) Creating productive and gainful employment opportunities.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
32. Consider the following statements in regard to the GDP of a country :
(1) Real GDP is calculated by keeping inflation into consideration.
(2) Nominal GDP is calculated on the basis of the prices of goods and services
produced in the current year.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
(1) Higher growth in GDP and population can occur together.
(2) Per capita income always decreases with high population growth.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
34. GDP deflator is used to :
(a) measure the relative reduction in GDP growth rate of a country.
(b) measure the inflation in a country.
(c) compare the GDP of a country vis a vis other countries of the world.
(d) estimate the purchasing power of the citizen of a country.
35. In India, rural incomes are generally lower than the urban incomes. Which of
the following reasons account for this?
(1) A large number of farmers are illiterate and know little about scientific-
agriculture.
(2) Prices of primary products are lower than those of manufactured products.
(3) Investment in agriculture has been lower when compared to investment in
industry :
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) 2 and 3
36. Human Development Index comprises literacy rates, life expectancy at birth
and
(a) GDP per head in the US dollars.
(b) GDP per head at real purchasing power.
(c) GNP in US dollars
(d) National Income per head in US dollars.
37. National Income is the
(a) NNP at market price
(b) NNP at factor cost
(c) Net Domestic product at market price
(d) Net domestic product at factor cost.
38. The ‘activity rate’ of an economy depends upon so many factors, such as :
1. School leaving age
2. Popularity of higher education
3. Social customs
4. Retirement age
Code :
(a) 1 and 2
(b) 2 and 3
(c) 2, 3 and 4
(d) 1, 2, 3 and 4
39. The “Dual Economy” is a mixture of ?
(a) traditional agriculture sector and modern industrial sector
(b) industrial sector and manufacturing sectors
(c) state ownership of the means of production
(d) industrial sector and trading of goods obtained through imports
(e) None of these
40. Market Based economic climate means:
(a) All financial determinations are taken based mostly on the demand and provide
forces
(b) Some financial choice are taken by authorities and different are left to market
forces
(c) Government has full handle over the exclusive sector
(d) Economic judgements are taken after maintaining in view the social welfare
41. In India, planned economy is based on?
(a) Gandhian system
(b) Socialist system
(c) Capitalist system
(d) Mixed economy system
42. Which one of the following states was having the highest Human Development
Index in the year 2012?
(a) Assam
(b) Kerala
(c) Uttar Pradesh
(d) Madhya Pradesh
43. Indian economy has witnessed highest growth rate in GDP in the year
(a) 2003 – 04
(b) 2004 – 05
(c) 2005 – 06
(d) 2006 – 07
44. Which one of the following economists proposed the LPG model of economic
development in India?
(a) Y.B. Reddy
(b) K.V. Kamath
(c) Manmohan Singh
(d) None of these
45. Economic planning is in
(a) Union list
(b) State list
(c) Concurrent list
(d) Not any specified list
46. The concept of Economic Planning in India is derived from which country?
(a) USA
(b) UK
(c) Russia
(d) France
47. In which year was the 20 point economic programme was announced for the
very first time?
(a) 1975
(b) 2006
(c) 1986
(d) 1982
48. Planning was considered a prerequisite :
(1) For balanced socio-economic development

(2) For extending the benefits of development in an even manner.
(3) For focussing on removal of regional disparities
(4) For maximizing the utilization of available resources
Codes :
(a) 1 and 2
(b) 1, 2 and 3
(c) 2, 3 and 4
(d) All the above
49. Consider the following statements regarding Indian planning.
(1) The second five year plan emphasized on the establishment of heavy industries.
(2) The third five year plan aimed to achieve self-sufficiency in foodgrains and
increase agricultural production to meet the requirements of industry and
exports.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
50. Which of the following can aid in furthering the Government’s objective of
inclusive growth?
(1) promoting self help group
(2) promoting micro, small and medium Enterprises
(3) Implementing the Right to Education Act
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
51. In the post-Independence period, economic reforms were first introduced in
India under :
(a) Janata Party Government (1977)
(b) Indira Gandhi Government (1980)
(c) Rajiv Gandhi Government (1985)
(d) P.V. Narsimha Rao Government (1990)
(1) LPG model of Indian Economy was fully implemented in Eighth Five Year plan.
(2) The Eighth plan envisaged an annual average growth rate of 5.6% but real
growth rate was 6.8%.

(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
53. From which one of the following enshrined in the constitution, the planning of
India derives its objectives and social premises?
(a) Fundamental Rights
(b) Fundamental Duties
(c) Directive Principles of State Policy
(1) The state sets broad parameters and goals for the economy.
(2) The targets to be achieved are broadly set by the state.
(3) The plan is made for the specific time period of about 15 years.
Which of the statements given above is/are correct about the Indicative planning?
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) only 1
(1) In the history of Indian planning, the actual growth rate of the GDP has never
been higher than the targeted growth rate.
(2) In the first five year plan, the actual GDP growth rate was more than the targeted
growth rate.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
56. Consider the following statements about the LPG model of economic
development process in India?
(1) Disinvestment of profit making public sector Enterprises.
(2) Permitting private sectors to establish Industrial Units without taking a licence.
(3) Chronically sick industries were referred to BIFR for the formulation of revival
or rehabilitation plan.
Which of the processes given above is/are taken after adoption of LPG model?
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) only 2
57. Which of the following is not a feature of India’s economic planning?
(a) Limited centralisation
(b) Democratic solution
(c) Planning of imperative nature
(d) Planning of indicative nature
58. Which of the following is true?
(a) Financial planning is more important than physical planning.
(b) Physical planning is more important than financial planning.
(c) Physical and financial planning are equally important.
(d) Physical and financial planning are complementary.
59. Which one of the following is not included in the Agriculture and Allied
Services of Indian Economy?
(a) Fishing
(b) Forestry
(c) Logging
(d) Food Processing
60. Which sector is the backbone of Indian economy?
(a) Service Sector
(b) Financial Sector
(c) Tourism Sector
(d) Agriculture Sector
1. Agriculture and Allied sectors contribute less than 20% of Gross Domestic
product of India.
2. Around 60% of net sown agricultural area of India is depended on rainfall.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
62. The standard of living in a country is represented by its
(a) Poverty ratio
(b) Per capita income
(c) National income
(d) Unemployment rate
63. Which one of the following is related with the Atkinson’s index of an economy
?
(a) A method to determine the income inequality
(b) An effect of supply demand mismatch
(c) A method to determine the unemployment

64. Which one of the following countries has the highest percentage of the services
sector in the GDP of the country?
(a) United States
(b) France
(c) United Kingdom
(d) Spain
65. Which of the following would cause consumption to rise?
(a) the GDP Deflator rises
(b) a greater proportion of the population is between age 20 and 30
(c) transitory income increases
(d) income is taken from poor people and given to rich people
66. The reason in difference between GNP and GDP is
(a) Gross Foreign Investment
(b) Net Foreign Investment
(c) Net Exports
(d) Net Factor Income from abroad
67. The most appropriate measure of a country’s economic growth is its
(a) Gross Domestic product
(b) Net Domestic product
(c) Net National product
(d) Per capita real income
68. The term National Income represents:
(a) Gross national product at market prices minus depreciation
(b) Gross national product at market prices minus depreciation plus net factor
income from abroad.
(c) Gross national product at market prices minus depreciation and indirect taxes
plus subsidies.
(d) Gross national product at market prices minus net factor income from abroad.
69. Human Development Index (HDI) is constructed with reference to
1. Life expectancy at birth, real GDP per capita, gross enrolment ratio, adult
literacy rate.
2. Life expectancy at birth, real GDP per capita, combined gross enrolment ratio,
adult literacy rate.
3. Life expectancy, GDP per capita, infant mortality rate, literacy rate.
4. GDP per capita, infant mortality rate, literacy rate
Codes:
(a) 1 and 2
(b) 1 and 3
(c) 3 only
(d) 1, 2 and 4
70. Consider the following statements relating to estimation of National
Income. [CDS-2011-II]
1. Foreigners working in Indian Embassies are normal residents of India.
2. Foreigners working in the office of WHO, World Bank, UNO etc, located in
India are not normal residents of India.
3. Indians working in foreign embassies in India are not normal residents of India.
Which of the statements given above is/are not correct?
(a) Only 1
(b) 1 and 3
(c) Only 3
(d) All of these
71. Which of the following statements is/are correct?
[CDS-2012-I]
1. If a country is experiencing increase in its per capita GDP, its GDP must
necessarily be growing.
2. If a country is experiencing negative inflation its GDP must be decreasing.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
72. National income ignores [CDS-2012-I]
(a) sales of a firm
(b) salary of employees
(c) exports of the IT sector
(d) sale of land
73. Consider the following statements [CDS-2012-II]
1. High growth will led to inflation.
2. High growth will lead to deflation.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
74. The effect of a government surplus upon the equilibrium level of NNP [Net
National Product] is substantially the same
as [CDS-2013-II]
(a) an increase in investment
(b) an increase in consumption

(c) an increase in saving
(d) a decrease in saving
75. Share of food in total consumption expenditure has been coming down as Per
Capita Income grew over time in last sixty years
because [CDS- 2014-I]
(a) people have been purchasing less food
(b) people have been preferring non-cereal items in their food basket
(c) growth in food expenditure has been lower than growth in per capita income
(d) percentage of the poor in population has increased over time
76. The value of all final goods and services produced by the normal residents of a
country and their property, whether operating within the domestic territory of
the country or outside in a year is termed as [CDS-2014-II]
(a) Gross National Income
(b) Net National Income
(c) Gross Domestic Product
(d) Net Domestic Product
77. National product at factor cost is equal to [CDS-2014-II]
(a) Domestic product + Net factor income from abroad
(b) National product at market prices - indirect taxes + subsidies
(c) Gross domestic-product - depreciation
(d) National product at market prices + Indirect taxes + subsidies
78. The economist who for the first time scientifically determined National
Income in India— [BPSC 2017]
(a) D.R. Gadgil
(b) V.K.R.V. Rao
(c) Manmohan Singh
(d) Y.V. Alagh
Five year Plans

79. During which Five Year Plan, the price level in Indian economy showed a
decline?
(a) Plan I
(b) Plan II
(c) Plan IV
(d) Annual plans
80. Which of the following is/are the functions of the National Development
Council of India?
(1) To prescribe guidelines for preparation of the national economic plan.
(2) To review the working of the national economic plan from time to time.
(3) To consider important questions of social and economic policy affecting national
development
Select the correct answer using the codes given below?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
81. The slogan of ‘poverty abolition’ was given in which Five Year Plan?
(a) Second plan
(b) Fourth plan
(c) Fifth plan
(d) Sixth plan
82. The government introduced an agricultural strategy which gave rise to Green
Revolution in India under the plan
(a) Third Five Year Plan
(b) Fourth Five Year Plan
(c) Fifth Five Year Plan
(d) Sixth Five Year Plan
83. The major emphasis on the first five year plan of India was
(a) agriculture
(b) employment
(c) industry
(d) export promotion
84. Which one of the following plans is also known as ‘Gadgil Yojana’?
(b) Fourth Five Year Plan
(c) Fifth Five Year Plan
85. The period of plan holiday in India was
(a) 1962 – 65
(b) 1966 – 69
(c) 1970 – 73
(d) 1973 – 76
86. Which of the following experienced the fastest expansion during the plan in
India?
(a) Agriculture
(b) Industry
(c) Services
(d) None of these
87. The final authority in India to adopt the five year plan for the country vests in :
(a) NITI Aayog

(b) The National Development Council
(c) The Union Cabinet
(d) The parliament
88. The theme of the approach paper of the Eleventh Five Year Plan has been :
(a) Indicative planning
(b) Growth with social justice
(c) Towards faster and more inclusive
(d) Planning for prosperity
89. In the context of Indian Five Year Plans, a shift in the pattern of
industrialization, with lower emphasis of heavy industries and more on
infrastructure being in :
(a) Fourth plan
(b) Sixth plan
(c) Eighth plan
(d) Tenth plan
90. Consider the following statements about Indian Economy?
(1) During 11th Five Year Plan, the foodgrain production steadily increased.
(2) During 11th Five Year Plan, the average inflation on the wholesale price Index is
above 10%.
(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
91. Under which five year plan did the government introduce an agricultural
strategy which gave rise to Green Revolution in India?
(a) Second Five Year Plan
(b) Third Five Year Plan
(d) Seventh Five Year Plan
(1) MNREGA was launched in the 11th five year plan.
(2) Indira Awas Yojana was launched in the 9th Five Year Plan.
(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
93. In India, the concept of minimum needs and directed anti-poverty programmes
were the innovation of :
(d) Seventh Five Year Plan
(1) In the 11th Five Year Plan, the growth rate of the agriculture sector was above
4%.
(2) In the 11th Five Year Plan, the agriculture sector contributed more than 25% in
the overall GDP of India.
(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
(1) The Ninth Five Year Plan was launched in the 50th year of India’s independence.
(2) For the first time in the Indian economy the GDP growth rate of the Ninth Five
Year Plan was set at 7%.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
96. Which one of the following is correct about the Twelfth Five Year Plan recently
approved by the Indian Government?
(a) 12th Five Year Plan of Indian Economy is from 2011 to 2016.
(b) 12th Five Year Plan aims to grow GDP at the rate of 10%.
(c) 12th Five Year Plan aims to sustain the inclusive growth which started in 11th
plan.
(d) Both (b) and (c) are correct about the 12th Five Year Plan.
(1) In the 11th Five Year Plan, the growth rate of the export was always positive.
(2) In the middle of the 11th Five Year Plan, the import growth was negative due to
external factors.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

98. Match List I with List II and select the correct answer using the codes given
below the list
List I List II
(Five Year Plan) (Objective)
A. First Plan 1. Growth with social justice
B. Third Plan 2. Sustainable inclusive growth
C. Fifth Plan 3. Self reliant and generating
economy
D. Twelfth plan 4. Agriculture, Irrigation and power
projects
Codes :
A B C D
(a) 2 4 3 1
(b) 2 3 4 1
(c) 4 3 1 2
(d) 1 3 2 1
(1) Jawahar Rozgar Yojana was launched in the Seventh Five Year Plan.
(2) Small-scale and food processing industries were given new impetus in Seventh
Five Year Plan.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
(1) Indo-china war had hampered the proper progress and implementation of Fourth
Five Year Plan in India.
(2) In the Indian Economy, the plan Holiday took place during 1966 to 1969
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

(1) The Fourth Five Year Plan period is from 1966-71.
(2) The Fourth Five Year Plan sought to raise the standard of living through
programmes designed to promote equality and social justice.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
102. Which of the following five year plans had the objectives of rapid
industrialization, increase in the national income, expansion of the opportunities
for employment and reduction in the inequalities with respect to income and
wealth?
(a) 2nd five year plan
(b) 5th five year plan
(c) 4th five year plan
(d) 7th five year plan
103. Which among the following Five Year Plans of the Indian Economy adopted
the indicative planning model?
(b) Sixth Five Year Plan
(c) Eight Five Year Plan
(d) Tenth Five Year Plan
104. Which one of the following Five year plans of Indian Economy was terminated
by the Janata Government?
(c) Seventh Five Year Plan
105. During which plan was the National Bank for Agriculture and Rural
Development (NABARD) established to facilitate the rural credit and
agriculture development?
106. A Five Year Plan was severely affected by the immigration of huge number of
people from Bangladesh was?
(a) First Five Year Plan
(b) Third Five Year Plan
(c) Fourth Five Year Plan

107. Which among the following plans adopted the policy for the universalization of
elementary education in India?
(a) Sixth Plan
(b) Eighth Plan
(c) Ninth Plan
(d) Eleventh Plan
108. The term “Hindu rate of growth” refers to the 3.70% per annum growth rate
achieved by the Indian economy over the first six Five -Year Plans” The term
was coined by:
(a) J.N. Bhagwati
(b) K.N. Raj
(c) Raj Krishna
(d) Sukhamoy Chakravarty
109. In which five year plan in Indian Economy, the targets for the crop function
were not fixed for the first time-
(a) Seventh five year plan
(b) Eighth five year plan
(c) Ninth five year plan
(d) Tenth five year plan
110. Which one of the following five year plans has the highest GDP growth rate in
Agriculture sector in India ?
(a) Sixth Five Year Plan
(b) Seventh Five Year Plan
(c) Eighth Five Year Plan
(d) Ninth Five Year Plan
111. Which one of the following five year plans has the highest GDP growth rate in
Agriculture sector in India?
(a) Eighth Five Year Plan
(b) Ninth Five Year Plan
(c) Tenth Five Year Plan
(d) Eleventh Five Year Plan
112. Consider the following statements about the second Five Year Plan :
1. Priorities were given in the production of iron and steel and heavy engineering
and machine building industries.
2. Strengthening the oil exploration and coal in India.
Which of the statements given above are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2

(d) Neither 1 nor 2
113. Which one of the Five Year Plans had a high priority to bring inflation under
control and to achieve stability in the economic situation?
[CDS-2016-I]
(a) Fourth Plan (1969-74)
(b) Fifth Plan (1974-79)
(c) Sixth Plan (1980-85)
(d) Seventh Plan (1985-90)
114. Which one of the following is not among the aims of the Second Five Year Plan
(1956 - 57 to 1960 - 61)?
[CDS-2016-I]
(a) Rapid industrialization with particular emphasis on the development of basic and
heavy industries
(b) Large expansion of employment opportunities
(c) Achieve self - sufficiency in food grains and increase agricultural production to
meet the requirements of industry and exports
(d) Reduction of inequalities in income and wealth and a more even distribution of
economic power
115. Which one of the following is not a recommendation of the Fourteenth Finance
Commission? [CDS-2015-II]
(a) Share of States in Central Divisible Pool is increased from 32 per cent to 42 per
cent
(b) Area under forest cover is an important variable in distribution of States’ share
among States
(c) Fiscal discipline is dropped as a variable in distribution of States share among
States
(d) Sector specific grant is recommended as in the previous Finance Commissions
116. Match the following
List I List II
(Five Year Plan) (Emphasis)
A. First 1. Food security and women
empowerment
B. Second 2. Heavy industries
C. Fifth 3. Agriculture and community
development
D. Ninth 4. Removal of poverty
Codes :
AB C D
(a) 1 2 4 3
(b) 1 4 2 3
(c) 3 2 4 1
(d) 3 4 2 1
117. Which of the following institutions was/were asked by the Government of India
to provide official estimates of black (unaccounted) money held by Indians,
both in India and abroad? [CDS-2013-I]
1. National Institute of Public Finance and Policy.
2. National Council of Applied Economic Research.
3. National Institute of Financial Management.
(a) Only 1
(b) 1 and 2
(c) 2 and 3
(d) All of these
118. In India, mergers and acquisition of firms are regulated
by [CDS- 2014-I]
(a) National Manufacturing Competitiveness Council
(b) Competition Commission of India
(c) Security and Exchange Board of India
(d) Department of Industrial Policy and Promotion
119. ‘Inclusive growth’ is a phrase used in India’s
[CDS- 2014-I]
1. 9th Plan
2. 10th Plan
3. 11th Plan
4. 12th Plan
Select the correct answer using the codes given below.
(a) 1, 2 and 3
(b) 2 and 4
(c) 3 and 4
(d) Only 4
120. Which of the following best explains the stated broad vision and aspirations of
the Twelfth Five Year Plan (2012-2017)? [NDA/NA-
SP-2016-I]
(a) Faster, Sustainable and More Inclusive Growth
(b) Modernisation of Industries and Strengthening Infrastructure.

(c) Enchancing Agricultural and Rural Incomes
(d) Checking Inflation and Strengthening non-economic variables like Nutritional
Requirements, Health and Family Planing
121. During the Eleventh Five Year Plan (FYP), agriculture sector in India witnessed
a growth rate of 3.3 per cent per annum which is higher than 2.4 per cent per
annum in the previous FYP. This is largely due to better performance
of: [NDA/NA-SP-2015-II]
(a) Crops and Livestock
(b) Oilseeds and Fibres
(c) Fishing and Oilseeds
(d) Fibres and Fishing
122. The Second Five Year Plan that called for the establishment of Socialist pattern
of society was commonly referred to as the [NDA/NA-SP-2015-I]
(a) Harrod-Domar Plan
(b) Mahalanobis Plan
(c) Nehru Plan
(d) Peoples Plan
123. As against a target of 4 per cent, the average annual growth rate of first four
years of the 12th Five Year Plan period (2012-17) in agriculture and allied
sector was—
[NABARD 2016]
(a) 3.0%
(b) 1.6%
(c) 3.5%
(d) 2.5%
124. First Five Year Plan of India was based on the—
[BPSC 2017]
(a) Harrod Domar Model
(b) Mahalanobis Model
(c) Dadabhai Naoroji Model
(d) J.L. Nehru Model
Poverty & Unemployment

125. Disguised unemployment generally means:
1. large number of people remain unemployed
2. alternative employment is not available
3. marginal productivity of labour is zero
4. productivity of workers is low
Find out the correct option from the code:
(a) 1 and 4 only

(b) 3 and 1 only
(c) 2 only
(d) 3 only
126. To obtain full benefits of demographic dividend, what should India do ?
1. Promoting skill development
2. Introducing more social security schemes
3. Reducing infant mortality rate
4. Privatisation of higher education
Which of the above statements is/are correct ?
(a) 1 only
(b) 2 only
(c) None of the above
(d) 3 and 4 only
127. Consider the following two statements and answer the question–
I. The rural poverty alleviation programme will henceforth run on mission mode.
II. National Rural Livelihood Mission is centrally sponsored programme
implemented by the states.
(a) Only I is correct
(b) Only II is correct
(c) Both I and II are correct
(d) None is correct
128. Disguised unemployment in India exists in
(a) Transport sector
(b) Agricultural sector
(c) Banking
(d) Service sector
129. The BPL formula was suggested for the evaluation of poverty in the
chairmanship of
(a) Suresh Tendulkar
(b) Govindacharya
(c) Rangarajan
(d) Kaushik
130. In which state of India during (2011-12) the poverty ratio calculated by the
Planning Commission was maximum?
(a) Bihar
(b) Odisha
(c) Jharkhand
(d) Chhattisgarh
131. According to the data studied by Planning commission in 2011–12, how much
the population of India falls under the poverty line?
(a) 14.2%
(b) 21.9%
(c) 31.2%
(d) 34.2%
132. Consider the following sectors of the Indian economy with respect to share of
employment.
1. Agriculture sector
2. Industrial sector
3. Services sector
Arrange these sectors from highest to lowest in terms of employment and select the
correct answer using the codes given below :
(a) 1, 2, 3
(b) 1, 3, 2
(c) 3, 1, 2
(d) 3, 2, 1
133. Which one of the following laws / curves stated that the lower the
unemployment in an economy, the higher the rate of Inflation ?
(a) Gini’s curve
(b) Verdoorn’s law
(c) Gibrat’s law
(d) Philips curve
134. Which one of the following curves is a graphical representation of the
relationship between unemployment and the job vacancy rate ?
(a) Philips curve
(b) Laffer’s curve
(c) Beveridge curve
(d) Friedman’s curve
135. If the actual unemployment rate is below the natural rate of unemployment, it
would be expected that:
(a) the rate of inflation would increase
(b) the Phillips curve would shift to the left
(c) wages would fall
(d) the natural rate of unemployment would fall
136. Which of the following statements is / are true with respect to Phillips curve?
1. It shows the trade - off between unemployment and inflation
2. The downward sloping curve of Phillips curve is generally held to be valid only
in the short run.
3. In the long run , Phillips Curve is usually thought to be horizontal at the non
accelerating inflation rate of unemployment (NAIRU)
below: [CDS-2016-I]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1, 2 and 3
137. Poverty level in India is established on the basis of
[UP-PCS 2009]
(a) per capital income in different States.
(b) house - hold average income.
(c) house - hold consumer expenditure.
(d) slum population in the country.
138. The concept of, Vicious Circle of Poverty’ is related to :
[UP-PCS 2014]
(a) Karl Marx
(b) Nurkse
(c) Adam Smith
139. Which among the following in India is the Nodal agency for estimation of
poverty at the national and state level?
[UP-PCS 2014]
(a) Finance Commission
(b) Rural Ministry
(c) Home Ministry
(d) Planning Commission
140. In the Indian context, the studies of poverty were made by
— [UGC-2016]
(i) Dandekar and Rath
(ii) P.K. Bardhan
(iii) B.S. Minhas
(iv) I.J. Ahluwalia
Select the correct answer from the codes given below:
Codes :
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (i), (ii) and (iii)
(d) (i), (ii), (iii) and (iv)
Agriculture Sector
141. In India, agriculture income is calculated by
(a) output method
(b) input method
(c) expenditure method
(d) commodity flow method
142. The farmers are provided credit from a number of sources for their short and
long term needs. The main sources of credit to the farmers include :
1. the Primary Agricultural Co-operative Societies, Commercial Banks, RRBs and
Private money lenders.
2. the NABARD, RBI, Commercial banks and Private money lenders.
3. the District Central Co-operative Banks (DCCB), the lead banks, IRDP and JRY
4. the Large Scale Multi-purpose programme, DCCB, IFFCO and Commercial
banks.
(a) All of the above
(b) 1 and 2 only
(c) 1 only
(d) 3 and 1 only
143. Green Revolution in India started from
(a) Kanpur
(b) Delhi
(c) Bengaluru
(d) Punjab
144. The Green Revolution in India has contributed to
(a) inter-regional inequality
(b) inter-class inequality
(c) inter-crop inequality
145. The importance of agriculture in Indian Economy is indicated by its
contribution to which of the following?
(a) National income and employment
(b) Industrial development and international trade
(c) Supply of foodgrains
146. Which one of the following Co-Operative societies is responsible for the
production of fertilizers?
(a) NAFED
(b) IFFCO
(c) NCDC
(d) TRI FED

147. The impact of the Green Revolution was felt most in the production of
(a) rice
(b) pulses
(c) oilseeds
(d) wheat
148. The Blue Revolution is related with
(a) Fish production
(b) Food grain production
(c) Oilseed production
(d) Milk production
149. Which of the following has not been a component of the agriculture strategy
that brought about the Green Revolution ?
(a) Greater intensity of cropping
(b) Guaranteed maximum prices
(c) New agricultural technology
(d) Package of inputs
150. The term Green Revolution has been used to indicate higher production through
(a) Creation of grasslands
(b) Planting more trees
(c) Creation of gardens in urban areas
(d) Enhanced agricultural productivity per hectare
151. Agriculture sector directly employs one of the following percentages of labour
force in India
(a) 20%
(b) 30%
(c) 40%
(d) 52%
152. The Minimum Support Price and procurement prices for agriculture products
are fixed by the Government on the recommendations of
(a) Competition Commission of India
(b) National Development Council
(c) Planning Commission
(d) Commission for Agricultural Costs and Prices (CACP)
153. Yellow Revolution refers to the production of
(a) wool
(b) fish
(c) shrimp
(d) Oil seeds
154. During which of the following years, average growth/rate (at constant prices) of
agriculture and allied sectors negative?
(a) 2002-03
(b) 2003-04
(c) 2005-06
(d) 2006-07
155. Among the items of export of agricultural and allied products from India during
the year 2005-06, which one of the following was the highest in the value?
(a) Tea
(b) Coffee
(c) Rice
(d) Marine products
156. Green Revolution in India has been most successful in case of
(a) Wheat and Rice
(b) Wheat and Potatoes
(c) Mustard and Oilseeds
(d) Tea and Coffee
157. Pink revolution is related to
(a) Onions
(b) Oil seeds
(c) Milk
(d) Wool
158. Gray Revolution belongs to
(a) Fish
(b) Milk
(c) Oil seeds
(d) Fertilizers
159. To address the problem of sustainable and holistic development of rainfed areas,
including appropriate farming and livelihood system approaches, the
government of India has set up the
(a) National Rainfed Area Authority
(b) National Watershed Development Project for Rainfed Areas
(c) National Mission on Rainfed Areas
(d) Command Area Development and Water Management Authority
160. When were Kisan Call Centres established?
(a) July 2000
(b) March 2002
(c) March 2004
(d) January 2004
161. Which of the following has not been a component of the agriculture strategy
that brought about the Green Revolution?
(a) Greater intensity of crops
(b) Guaranteed maximum prices
(c) New agricultural technology
(d) Package of inputs
1. The Union Government fixes the statutory minimum price of sugarcane for each
sugar season.
2. Sugar and sugarcane are essential commodities under the Essential Commodities
Act. Which of these statements are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither1 nor 2
163. What is the contribution of livestock in agricultural sector?
(a) 5%
(b) 15%
(c) 25%
(d) 10%
164. The importance of agriculture in Indian economy is indicated by its contribution
to which of the following?
(a) National Income and Employment
(b) Industrial development and international trade
(c) Supply of food-grains
(d) All the above
1. Indian Government announces the minimum support price for the wheat rice and
sugarcane in a year.
2. The common paddy has higher minimum support price than the paddy Grade-A.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. India is meeting 85% of the urea fertilizer through indigenous production.
2. India produces surplus amount of the fertilizers containing phosphorous and
potassium.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
167. Consider the following reasons :
1. Lack of irrigation facilities, low productivity of land.
2. Single crop mode of cultivation.
3. Indian Agriculture gamble on the monsoon.
Which of the reasons given above is/are responsible for the migration of people from
rural to urban areas
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) 2 only
168. With reference to the agriculture sector of India, consider the following
statements
1. Rural infrastructure Development Fund disperses loans to the states to complete
the minor irrigation projects.
2. Rural infrastructure Development Fund is managed by the public sector
Commercial Banks.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
169. Which one of the following is correctly matched?
Revolution Sector
(a) Rainbow : Industry
(b) Blue : Fisheries
(c) Yellow : Agriculture and Allied Services
1. Agriculture including allied activities accounted for about 55% employment in
the country according to census 2011.
2. The growth in agriculture and allied sectors is a necessary condition for
inclusive growth in India.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
171. Consider the following statements about the National Cooperative Marketing
Federation of India Limited (NAFED).
1. NAFED promotes the inter-state trade as well as export of certain agricultural
commodities to many foreign countries.
2. NAFED is responsible for the movement of the essential commodities from
surplus areas to scarcity areas.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
172. The target for agricultural credit for 2017-18 per person, is fixed at which of the
following amounts?
(a) ` 10 lakhs
(b) ` 15 lakhs
(c) ` 8 lakhs
(d) ` 12 lakhs
173. Consider the following statements about Indian Agriculture:
1. The area under foodgrains has declined in the last two decades.
2. The average farm size in the country is very small and declining over the years.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. India ranks first in the world in dairy milk production.
2. The per capita availability of dairy milk in India is more than the per capita
availability of the world.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
175. The Commission of Agricultural Costs and Prices fixes the
(a) Support price
(b) Wholesale price
(c) Retail price

(d) None of these
176. Which one of the following items has the highest share of India in the World
Exports?
(a) Coffee, tea, mate, spices etc
(b) Pearls, precious stones, metals, coins, etc
(c) Lac, gums, resins, vegetable saps, and extracts etc
(d) Vegetable plaiting materials, vegetable products etc
177. On which of the following item groups, is the share of food expenditures
increasing at the fastest rate in India?
(a) Milk and its Products
(b) Pulses
(c) Cereals
(d) Vegetables
178. Which one of the following crops has been exceeding target since 2004-05 in
India but its growers have been committing suicide in large numbers in many
parts of the country every year?
(a) Pulse
(b) Cotton
(c) Oilseeds
(d) Wheat
179. Assertion (a) : Agriculture is the main source of livelihood of people in India.
Reason (R): Measures for agricultural development should be undertaken.
Codes:
(b) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
180. Which of the fallowing are responsible for the decrease of per capita holding of
cultivated land in India?
[CDS-2012-II]
1. Low per capita income.
2. Rapid rate of increase of population.
3. Practice of dividing land equally among the heirs.
4. Use of traditional techniques of ploughing.
(a) 1 and 2
(b) 2 and 3
(c) 1 and 4
(d) 2,3 and 4
181. Which of the following statements about the Livestock sector in India is/are
correct ?
1. Livestock contributed about 25 per cent of gross value added in agriculture
2. It provides self employment to a large segment of population
3. Rapid growth of livestock sector can be egalitarian and inclusive
[NDA/NA-SP-2015-II]
(a) 3 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
182. Which one of the following pairs is not correctly
matched? [UP-PCS 2015]
(a) Industrial Finance – SIDBI
(b) Social Security Measures – Bharat Nirman
(c) Rural Credit – NABARD
(d) Rural Employment – SJSRY
183. During the year 2014-15, India’s exports of animal products is reported to be
over ` 33,128.30 crore. Which of the following form of meat was the single
largest item exported during the period? [NABARD 2016]
(a) Poultry products
(b) Sheep/Goat meat
(c) Processed and other meat
(d) Buffalo meat
Industries: Manufacturing & Service Sectors

184. Which sector of Indian economy has shown remarkable expansion during the
last decade?
(a) Primary sector
(b) Secondary sector
(c) Tertiary sector
(d) Mining sector
185. When development in economy takes place, the share of tertiary sector in
national income
(a) first falls and then rises
(b) first rises and then falls
(c) keeps on increasing
(d) remains constant
186. Which of the following can be called as a part of the service sector?
(a) Textile mills
(b) Banking
(c) Coal mines
(d) Agricultural
187. Who wrote a book describing the theory of economic drain of India during
British rule?
(a) Lala Lajpat Rai
(b) Mahatma Gandhi
(c) J.L. Nehru
(d) Dadabhai Naoroji
188. As the economy develops, the share of the tertiary sector in the GDP:
(a) Decreases
(b) Decreases then increases
(c) Increases
(d) Remains constant
189. The slack season in the Indian economy is
(a) Feb-April
(b) Mar-April
(c) Jan-June
(d) Sept-Dec
190. What is the approximate share of SSIs in gross industrial value added in the
Indian economy?
(a) 25%
(b) 30%
(c) 5%
(d) 40%
191. What are the difference between Millenium Development Goals and
Sustainable Development Goals?
1. Millenium Development Goals (MDGs) were not developed through an inter-
governmental process, while SDG were.
2. All the MDGs are applicable only to the developing countries except for MDG 8
which relates to aid and finance.
Options :
(a) 1 only
(b) 2 only
(c) Both 1 and 2

(d) None of these
192. Quaternary sector implies
(a) Activities related to mining and quarrying
(b) Activities related to manufacturing
(c) Fishing activities
(d) Research and developmental activities
(1) The growth of wire line telephone connections in the last five years is decreasing
every year.
(2) The share of private operations in the wireless telephone in India is more than
85%.
Which of the following statements above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
194. ‘Udyog Bandhu’ is a/an?
(a) labour supplying agency
(b) sick industry rehabilitation agency
(c) organisation to assist industrial units in solving time bound establishment and
investment related problems
(d) agency for financing industrial development
195. Who among of the following is appointed as the President of ASSOCHAM.
(a) R. Shiv Kumar
(b) Sandeep Jajodia
(c) Rana Kapoor
(d) Sunil Kanoria
196. NASSCOM is the organisation of companies of which sector?
(a) Media
(b) Mobile phone service
(c) Information Technology
(d) Automobiles
197. Which Indian Company has been included for the first time in U.S. A’s index
NASDAQ-100?
(a) Infosys
(b) Tata Motors
(c) ICICI Bank
(d) Videsh Sanchar Nigam Limited
198. When was the “Package for Promotion of Micro and Small Enterprises”
announced?
(a) August 2005
(b) February 2007
(c) March 2009
(d) November 2010
199. What is the major contribution of the Electronics industry to the country?
(a) Maximised wealth formation
(b) Reduced poverty
(c) Improved standard of living
(d) Encouraged employment
200. The number of women entrepreneurs in small scale industrial region is highest
in the state of?
(a) Karnataka
(b) Kerala
(c) Maharashtra
(d) Tamil Nadu
201. Which one of the following is a raw material oriented industry?
(a) Sugar industry
(b) Ship Industry
(c) Petroleum industry
(d) Light engineering industry
202. Novelis has been acquired and merged with—
(a) Tata Steels
(b) SAIL
(c) HINDALCO
(d) Jindal Steels
203. Which of the following is/are cause(s) of slow growth of private enterprises in
India’s industrialization (1850-1957)?
(a) Unimaginative private enterprise, short-sighted Indian industrialists.
(b) complete absence of financial institutions to help transfer of savings to industrial
investment.
(c) Banking was not highly developed & was more concerned with commerce rather
than industry.
(d) All of these
204. Which is the most important company in machine tools?
(a) HMT Machine Tools
(b) PMT Machine Tools
(c) Guindy Machine Tools
(d) Praga Tools
205. The largest source of revenue for Britishers in India was from ______?
(a) Textile and Jute Industry
(b) Gems and Stone Industry
(c) Temple Tax
(d) Land revenue
206. When was the first modern paper mill of the country set up?
(a) 1827
(b) 1812
(c) 1846
(d) 1854
207. Durgapur steel plant was set up in assistance of
(a) UK
(b) USA
(c) rance
(d) Germany
208. Which unit of the Hindustan Copper Ltd is the first copper smelting unit in
India?
(a) Malanjkhand Copper Project (MP)
(b) Khetri Copper Complex (Rajasthan)
(c) Indian Copper Complex (Jharkhand)
(d) Tajola Copper Project (Maharashtra)
209. When was the ‘Policy Package for Setting up Credit to Small and Medium
Enterprises’ announced?
(a) August 2005
(b) February 2007
(c) March 2009
(d) November 2010
210. GCIL—an American company of chemical sector has been acquired by—
(a) Reliance group
(b) Shriram group
(c) Birla group
(d) Tata group
211. Kuwait’s biggest Mobile Telecommunication Company known as Zain has been
bought by—
(a) Bharti Airtel
(b) Reliance Communication
(c) Vodafone
(d) Aircel
212. Which of the following pairs are correctly matched?
Enterprise Industrial Group
VSNL Bharti Group

Mundra SEZ Adani Group
CMC Ltd. Tata Group
IPCL Reliance Group
(a) 1, 2 and 3
(b) 3 and 4
(c) 1, 2 and 4
(d) 2, 3 and 4
213. Which one of the following pairs is not properly matched?
Industry Industrialists
Reliance Mukesh Ambani
Wipro R. Krishnamurthy
Airtel Bharati Mittal
Nano Car Ratan Tata
214. Match the given companies with their locations and select the correct answer by
using the codes given below :
Company Location
A. BALCO 1. Hirakund
B. HINDALCO 2. Korba
C. Indian Aluminium company 3. Koraput
D. NALCO 4. Renukoot
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 3 4 1 2
(d) 2 1 4 3
215. Correlate the following
Industry Field
A. Basic industry 1. Fertilizer
B. Strategic industry 2. Petroleum

C. Critical industry 3. Automobile
D. Goods based industry 4. Arms and Ammunition
Code :
A B C D
(a) 4 2 3 1
(b) 4 1 2 3
(c) 1 4 2 3
(d) 2 4 3 1
216. Read the following statements carefully :
1. In public sector of India there are basic and heavy industries.
2. All industries of public sector are profit oriented.
3. Jobs are secured in the industries of public sector.
Answer on the basis of following codes:
(a) 1 and 2 are true
(b) 1 and 3 are true
(c) 2 and 3 are true
(d) 1, 2 and 3 are true
217. National Renewal Fund was constituted for the purpose of:
(a) Providing pension for retiring employees.
(b) Social security
(c) Rural reconstruction
(d) Restructuring and modernisation of industries
1. The first modern steel producing unit was established at Kulti (W. Bengal) in
1874.
2. Bhilai steel plant was established during second Five Year Plan.
3. Rourkela steel plant was established with the collaboration of the west Germany.
4. Bokaro steel plant was established during the third Five Year Plan.
Which of the statements are correct?
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 1, 3 and 4
(d) 1, 2, 3 and 4
219. Maruti views Tata Motors as a prominent competitor but does not view Volvo
as a competitor. This type of competition in the market is known as
(a) Product competition
(b) Production flow competition

(c) Cost control competition
(d) None of these
220. Consider the following pairs :
Firm Group
Ashok Leyland Hinduja
Hindalco Industries A. V. Birla
Suzlon Energy Tulsi Tanti
Which of the pairs given above are correctly matched?
(a) 1 and 2
(b) 2 only
(c) 1 and 3
(d) 1, 2 and 3
221. Consider the following statements about Tata Steel:
1. It is Asia’s first privately own integrated iron and steel plant.
2. It is the first company outside Japan to get the Deming Application Prize in 2008
for excellence in total quality management
3. Immediately after the enactment of the Provident Fund Law in India, Tata Steel
introduced provident fund for its employees.
4. It is the first company in the world to get social accountability 8000 certification
from the social accountability international from the USA.
(a) 2 and 3
(b) 3 and 4
(c) 1, 2 and 3
(d) 1, 2, 3 and 4
1. MMTC limited is India’s largest international trading organisation.
2. Neelanchal Ispat Nigam Limited has been set up by MMTC jointly with the
government of Odisha.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
223. Consider the following statements about the Navaratna status industries.
1. Navaratna was originally assigned to nine public sector enterprises in 1997.
2. The number of PSEs (Public Sector Enterprises) having Navaratna status is now
more than 15 industries.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. The first petrochemical industry in India was started with the establishment of
National organic chemical industry limited in sixties.
2. The real thrust of petrochemical industry in India came with the establishment of
Indian Petrochemical Corporation Limited (IPCL) at Baroda.
Which of the statements given above is/are:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
225. Which one of the following is not correctly matched?
(a) Hindalco industries : Novelis
(b) Tata Steel : Corus Group
(c) Jet Airways : Air Sahara
(d) Kingfisher Airlines : MDR Airlines
1. Packaging machinery industry, like other industrial machinery is allowed for
100%. FDI under automatic approval.
2. Food processing machinery can be classified under the general category of
industrial machinery which is de-licensed under the current industrial
policy and qualifies for 100% FDI under automatic approval.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. Miniratna public sector enterprises can be a joint venture, set subsidiary
company or overseas office but with certain conditions.
2. Till now there are less than 50 public sector enterprises which have been given
Miniratna status by the Indian government.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. The USSR assisted in building of Bhilai Steel Plant.
2. The British assisted in the building of the Bokaro Steel Plant.
(a) 1 only
(b) 1 only
(c) Both 1 and 2
(d) Neither 1 nor 2
229. In India, in the overall index of industrial production, the indices of eight core
industries have a combined weight of 37-90%. Which of the following are
among those eight core industries?
1. Cement
2. Fertilizers
3. Natural gas
4. Refinery products
5. Textiles
(a) 1, 2, 3, 4 and 5
(b) 1, 2, 3 and 4
(c) 2, 3, 4 and 5
(d) 2, 3 and 5
230. A Labour intensive industry is one that :
(a) Requires hard manual labour
(b) Pays adequate wages to the labour
(c) Employs more hands
(d) Provides facilities to labour
231. Identify the correct sequence of the establishment of steel plant in India from
the earliest to the latest.
(a) Bokaro–Jamshedpur, Vishakhapatnam, Bhilai
(b) Jamshedpur–Bhilai, Bokaro–Vishakhapatnam
(c) Bhilai, Jamshedpur, Vishakhapatnam, Bokaro
(d) Jamshedpur, Bokaro, Bhilai, Vishakhapatnam
1. The first news print plant was set up in India at Nepanagar.
2. The first modern steel plant in India was set up at Bhadrawati.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
1. The erratic trend in the production of sugar is mainly due to monsoons.
2. The output of sugar is influenced by both cane and Gur prices.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Industries clusters Location
Textiles Tirupur
Marble Kishangarh
Surat Gems & Jewellery
All of the above
1. National Thermal Power Corporation has diversified into hydropower sector.
2. Power Grid Corporation of India has diversified into telecom sector.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
236. Which one of the following statement is incorrect?
(a) India is the second largest manufacturer of cement in the world.
(b) India ranks 4th in the world in terms of production of ceramic tiles.
(c) India holds 3rd position in the production of salt in the world.
(d) India is the second largest producer of cotton in the world after China.
237. Sunrise industries are industries :
(a) Which are well developed and have ample scope for future development.
(b) Which improve exports performance of the country.
(c) Which are small scale industries
(d) Which have high growth potential and meet future requirements of the economy.
1. The per capita consumption of plastics in India is the highest in the world.
2. The petrochemical industry in India gives a big boost to the small scale
industries.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
239. What is/are the recent policy initiative of government of India to promote the
growth of manufacturing sector?
1. Setting up of National Investment and Manufacturing Zones.
2. Providing the benefit of single window clearance.
3. Establishing the technology acquisition and development fund.
(a) 2 only
(b) 1 and 3
(c) 2 and 3
(d) 1, 2 and 3
240. Container Corporation of India Limited (CONCOR), a public sector
undertaking is under the administration control of which of the following
ministries?
(a) Heavy Industry
(b) Small scale
(c) Ministry of Railways
(d) Shipping Road Transport and Highways
241. What would be the new investment ceiling rate for Maharatna Public Sector
Enterprises?
(a) ` 2000 crore
(b) ` 5000 crore
(c) ` 7000 crore
(d) ` 10000 crore
242. Which one of the following is not an immediate indicator of Industrial
Sickness?
(a) Drop in profitability
(b) Labour unrest
(c) Shrinking of market credit
(d) Decline in market share
243. Which one of the following is not a feature of Limited Liability Partnership
Firm?
(a) Partner should be less than 20
(b) Partner and management need not to be separate
(c) Internal governance should be decided by mutual agreement among partners

(d) It is a corporate body with perpetual succession
244. For which one of the following items, is Tiruppur well known as a huge
exporter to many parts of the world?
(a) Gems and Jewellery
(b) Leather Goods
(c) Knitted Garments
(d) Handicrafts
245. Which one of the following is not correct about ‘plastic parks’?
(a) This is a scheme too assist plastic industries in India
(b) These parks will help to develop biodegradable plastics
(c) To increase competitiveness and investment in plastic sector is one of the
objectives
(d) It emphasises environmentally sustainable growth in plastic sector with cluster
development approach
Industry Status
(a) SAIL Maharatna
(b) IOC Navratna
(c) Coal India Ltd. Mini-Ratna
(d) BHEL Mini-Ratna
247. Token privatisation or deficit privatisation of public sector units occurs when
the government sells
(a) 5% of shares
(b) 10% of shares
(c) 49% of shares
(d) 51% of shares
248. Which one of the following cities is identified as the hottest outsourcing
destination in the world ?
(a) Dublin, Ireland
(b) Bengaluru, India
(c) Makati city, the Philippines
(d) Tokyo, Japan
249. Which of the following statements regarding chemical industry in India is /are
correct?
1. Chemical industry is one of the oldest industries in India
2. Dyestuff sector is one of the important segments of chemical industry
3. Textile industry accounts for the largest consumption of dyestuffs
[CDS-2016-I]
(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3
250. Which one of the following is not a part of service sector in
India? [CDS-2015-II]
(a) Transport
(b) Construction
(c) Hotels and restaurants
(d) Insurance
251. Which one of the following is not correct in the context of industrial clusters
development in India? [CDS-2015-II]
(a) Industrial clusters play an important role for the MSME participants in their
inclusiveness, technology absorption and efficiency improvement
(b) Industrial clusters are visible in traditional handloom, handicrafts and modern
SME
(c) Industrial cluster programmes in India are administered by various ministries
(d) Industrial clusters lead to promotion of monopoly in the market
252. Which of the following statements in the context of income-environment
relationship is /are correct?
(1) Pollution trends tend to follow an inverse-U shaped relationship across different
stages of economic development.
(2) In the beginning stage, pollution increases due to urbanization and
industrialization.
(3) In the later stage, pollution declines due to structural changes towards services
sector.
Select the correct answer using the code given below.
[CDS-2015-II]
(a) 1 only
(b) 1 and 2 only
(c) 1, 2 and 3
(d) 2 and 3 only
253. Which of the following occupations are included under secondary sector as per
the national income accounts ?
[CDS-2013-I]
1. Manufacturing
2. Construction
3. Gas and water supply
4. Mining and quarrying
(a) 1, 2, 3 and 4
(b) 1, 2 and 4
(c) 1, 2 and 3
(d) 3 and 4
254. Division of labour often involves
1. specialized economic activity.
2. higly distinct productive roles.
3. involving everyone in many of the same activities.
4. individuals engage in only a single activity and are dependent on others to meet
their various needs.
[NDA/NA-SP-2016-I]
(a) 1, 3 and 4 only
(b) 1, 2 and 4 only
(c) 3 only
(d) 2 and 4 only
255. Which one of the following is useful in paper manufacturing
industry? [NDA/NA-SP-2015-II]
(a) Fibrous plants
(b) orchids
(c) Non-flowering plants
(d) Plants growing in high altitude
256. Which one of the following is not the problem of Small Scale Industries
(SSIs)? [UP-PCS 2008]
(a) Finances
(b) Marketing
(c) Raw materials
(d) Strikes and lockouts
257. HAL is related to manufacturing of [UP-PCS 2008]
(a) Telecommunication equipments
(b) Aircrafts
(c) Space missiles
(d) War missiles
258. For the location of which one of the following industries, the availability of
raw material is not the primary consideration? [UP-
PCS 2015]
(a) Iron and Steel
(b) Sugar
(c) Electronics
(d) Cement
259. Infrastructure cess is a levy/tax on— [UGC-2016]

(a) Builders
(b) Railways
(c) Motor vehicles
(d) Public Transport
260. Which is not included in 8 core sectors in India?
[Chhatis-PSC 2016]
(a) Coal
(b) Fertiliser
(c) Electricity
(d) Chemical
261. Which is not included in manufacturing sector?
[Chhatis-PSC 2016]
(a) Large Industry
(b) Small Scale Industry
(c) Micro Industry
(d) Construction Industry
1. (b) The concept of mixed economy evolved from the ideas of Keynes. The
concept of mixed economy means that both private enterprises and public
enterprises coexist. However, the condition attached is that the private
enterprises must work for serving the society rather than having only self
interest. Further the private enterprises may not be allowed in every sector
of the economy like area of national importance.
There are 3 types of economics system:-
a. Capitalism - the private ownership of the means of production (capital) and a
market economy for co-ordination. As-corporate capitalism
b. Mixed Economy Example - American school, Japanese system, Nordi model,
Social corporatism etc
c. Socialism - In this economic system, two coordinating mechanism (planning and
market) subdended into planned socialist and market socialist system.
2. (b) India is a labour-surplus economy because in India there is disguised
unemployment along with under-employment which means that qualified,
skilled workforce willing to work is available but there are not enough
employment opportunities.
Trade Surplus Economy - Economic measure of positive Balance of trade
where a country’s export exceed its imports.
Surplus Labour is concept used by Karl Marx in his critique of political
economy.
Capital Surplus - It is equity which cannot otherwise be classified as
capital stock or retained earnings.
3. (d) The Indian Economy is characterised by pre-dominance of agriculture, low
per capita income and massive unemployment. In India contribution of
agriculture to GDP is around 17.9%.
4. (d) Private income arising in a country does not include current payments on
foreign loans. Private income includes any type of income received by a
private individual or household, often derived from occupational activities,
or income of an individual that is not in the form of a salary (e.g. income
from investments). Thus private income includes factor income from net
domestic product, net factor income from abroad & current transfers from
government.
[Private income = Domestic product accruing to the private sector + Net factor
income from abroad + Net other transfer income.]
5. (c) The term was coined by Indian economist Raj Krishna. The Hindu rate of
growth is a derogatory term referring to the low annual growth rate of the
socialist economy of India before 1991, which stagnated around 3.5% from
1950s to 1980s.
6. (a) GDP at factor cost is GDP at market price minus indirect taxes plus
subsidies. GDP at factor cost measure the value of output in terms of what
it really cost to produce.
Gross value of output = Value total Sales Goods & Services + Value
of changes in the inventories.
The Sum of net value added in various economic activities is known as GDP at
factor cost.
7. (a) Per capita income is obtained by dividing national income by total
population of the country per capita income, also known as income per
person, is the mean income of the people in a country. It is calculated by
taking a measure of all sources of income in the aggregate (such as GDP or
Gross national income) and dividing it by the total population.
8. (d) GDP is defined as the value of all final goods and services produced in an
economy in a year. The total quantity of goods produced in an economy
during year are multiplied by their current prices to get the GDP.
Gross Domestic Product can be calculated using formulas.
GDP = C + G + I + NX
C - Private consumption or consumer spending in nation economy.
G - Sum of Govt. spending.
I - Sum of all the country’s investment including business Capital expenditure.
NX - Nation’s total next exports
NX = Export – Import
9. (a) Depreciation is equal to GNP–NNP (Gross national products–Net national
products)
In economic, Depreciation is the gradual decrease in the economic value of the
capital stock of a form nation or other entity.
10. (d) Investment method is not a method of measurement of National income.
There are three methods of measurement: income method, product or value
added method and the expenditure method.
Investment method in only appropriate if the property is let or operated
under as management structure by a third party.
Income method - Under this method National income is measured as a
flow of factor income.
11. (d) Net National Product (NNP) of a country is GNP minus depreciation
allowances. NNP is the actual addition to year’s wealth. While calculating
GNP, we ignore depreciation of assets but in reality the process of
production uses up the fixed assets or there is some wear and tear or fixed
assets by process of depreciation. In order to arrive at NNP we deduct
depreciation from GNP.
12. (b) National Income is based on the production of goods and services. A
variety of measures of national income and output are used in economics
to estimate total economic activity in a country or region, including gross
domestic product (GDP), gross national product (GNP), net national
income (NNI), and adjusted national income (NNI* adjusted for natural
resource depletion).
13. (a) Rate of GDP growth is a major indication of the state of the economy of a
country. Economic growth is the increase in the market value of the goods
and services produced by an economy over time. It is conventionally
measured as the percent rate of increase in gross domestic product.
14. (b) GNP is the total value of all final goods and services produced within a
country in a particular year, plus income earned by its citizens (including
income of those located abroad), minus income of non-residents located in
that country. GNP measures the value of goods and services that the
country’s citizens produced regardless of their location.
Gross National Income - It is total domestic and foreign output claimed
by residents of country consisting of GDP plus factor income earned by
foreign resident minus income earned in the domestic income by non-
resident.
15. (d) NNP at factor cost is equivalent to national income. Net National Product
at factor cost is the aggregate payments made to the factors of production.
NNP at FC is the total incomes earned by all the factors of production in
the form of wages, profits, rent, interest etc. plus net factor income from
abroad.
16. (c) Tertiary sector of the Indian economy contributes largest to the GDP.
During last decade tertiary sector has shown remarkable expansion. The
economy is divided into three sectors on the basis of activities-primary,
secondary and tertiary. Primary sector is involved into agriculture,
secondary sector is involved into manufacturing, mining, construction
while tertiary sector is involved into trade, transport, communication,
banking & other services. In the last decade, India has expanded maximum
in providing services like IT, telecommunication, healthcare, tourism
which is contributing around 60% to GDP.
17. (c) Central Statistical Organisation (CSO), prepares the estimates of national
income in India. The first official estimates of the national income,
prepared by the CSO at constant prices with base year 1948-49, as well as
at current prices, were brought out in 1956.
Planning Commission - It was an institution of Govt. of India which

formulated India’s Five year plans.
Headquarters - New Delhi
Reserve Bank of India - India’s central Banking institution, which control
the monetary policy of Indian Rupee.
Indian Statistical Institute - Institution devoted to research, teaching and
application of statistics, natural science & social science.
18. (a) Service sector is one of the three economic sectors. it includes:
telecommunication, hospitality industry/tourism, mass media,
healthcare/hospitals, information technology, banking, insurance,
investment management, accountancy, legal services, consulting, retail
sales, real estate, education. Maximum contribution to national income
comes from service sector which contributes more than 50%.
19. (a) Dadabhai Naoroji had estimated national income in India first. National
income estimate before independence was prepared by Dadabhai Naoroji
in 1876. He estimated national income by estimating the value of
agricultural production and then adding some percentage of non–
agricultural production. This method was non–scientific.
VKRV Rao - The first person to adopt a scientific procedure postmating
the national income was Dr. VKRV Rao in 1931.
R.C. Dutt - He was an Indian civil servant, economics, historian, writer
and translator of Ramayan & Mahabharat.
D.R. Gadgil - A social scientist and the first critic of Indian planning.
20. (b) National income is the sum total of wages, rent, interest, and profit earned
by the factors of production of a country in a year. Thus it is the aggregate
values of goods and services rendered during a given period counted
without duplication.
21. (d) The most appropriate measure of a country’s economic growth is its per
capita real income. Per capita income is average income, a measure of the
wealth of the population of a nation. It is used to measure a country’s
standard of living thus a better indicator of economic growth.
Economic growth is the increase in the inflation-adjusted market value of the
Goods and services produced by an economy overtime.
22. (b) The existence of a parallel economy or black money makes the monetary
policies less effective. Parallel economy, based on the black money or
unaccounted money, causes high circulation of money in the market and
thus causes inflation etc.
Black Money - Black Money is the proceeds of an illegal transaction on
which income and other taxes have not been paid and which can only be
legitimised by same form of money Laundering.
23. (b) The philosophy of ‘Laissez-Faire’ is associated with industrial state.

Laissez Faire - Abstention by Govt. from interfering in the working of
free market.
24. (b) In free economy, inequalities in income is due to private property and
inheritance.
Economic Inequality is the difference found in various measure of
economic well being among individual in a group, or among countries.
25. (a) Personal income- direct taxes + fees+ fines+ social security contribution by
employers. The amount of money that households have available for
spending and saving after income taxes have been accounted for.
Disposable personal income is often monitored as one of the many key
economic indicators used to gauge the overall state of the
economy.Disposable income is total personal income minus personal
current taxes.
Disposable Personal Income is the amount of money that households have avail
a see for spending & saving after income taxes have been counted for.
P.I = Direct taxes + fees + fines + social society contribution by
employees
26. (c) The first person to adopt a scientific procedure in estimating the national
income was Dr. VKRV Rao in 1931.
PN Dhar - He was an economist & head of Indira Gandhi’s Secretariat
Jagdish Bhagwati - An Indian Economist. He is University professor of
economics and Law at Columbia University.
27. (c)
28. (c)
29. (a) Imperative planning is not a feature of economic planning of India. In case
of imperative planning economic activities belong to public sector. In this
type of planning economic decisions are made through a central planning
authority instead of a market system. There is absence of institutions of
private property, competition and profit motive of industrialists.
30. (b) Green shoots is the first signs of an improvement in an economy that is
performing badly. It was first used in this sense by Norman Lamont, the
then Chancellor of the Exchequer of the United Kingdom, during the 1991
recession.
31. (c) Inclusive growth is a concept which includes equitable allocation to every
section of society. It creates an environment of equality in opportunity in
all dimensions such as employment creation, market, consumption, and
production and has created a platform for people who are poor to access a
good standard of living.
32. (c) Real Gross Domestic Product (real GDP) is a macroeconomic measure of
the value of economic output adjusted for price changes (i.e., inflation or
deflation). Nominal gross domestic product is defined as the market value
of all final goods produced in a geographical region.
33. (c) Higher growth in GDP and population can occur together. Per capita
income always decreases with high population growth as income per
person decreases with rise in population.
34. (b) GDP deflator is an economic metric that accounts for inflation by
converting output measured at current prices into constant-dollar GDP. The
GDP deflator shows how much a change in the base year’s GDP relies
upon changes in the price level.
35. (a) In India a large number of farmers are illiterate and know little about
scientific-agriculture methods. Prices of primary products are lower than
those of manufactured products and investment in agriculture has been
lower when compared to investment in industry. All these reasons are
responsible for lower rural income.
36. (b) HDI combines three dimensions: A long and healthy life: Life expectancy
at birth, Education index: Mean years of schooling and Expected years of
schooling and a decent Standard of living.
37. (b) National Income is the Net National product at the factor cost.
38. (d) The labour force of an economy is known as the activity rate (also called
participation rate). It is shown in per cent and always as a proportion of an
economy. The concept of the ‘demographic dividend’ is related to this rate.
39. (a) A dual economy is the existence of two separate economic sectors within
one country, divided by different levels of development, technology, and
different patterns of demand. The concept was originally created by Julius
Herman Boeke to describe the coexistence of modern and traditional
economic sectors in a colonial economy.
40. (a) Market based economic climate refers back to the financial system the
place all financial judgements are taken based mostly on the demand and
provide circumstances prevailing out there. Government has minimal
interference in financial actions. Private gamers are free to supply the
items and expertise based mostly on the demand and provides alerts out.
41. (d) The planned economy is based on mixed economy system. The concept of
mixed economy evolved from the ideas of Keynes. The concept of Mixed
Economy means that both private enterprises and public enterprises
coexist. However the condition attached is that the private enterprises must
work for serving the society rather than having only self interest. Further
the private enterprises may not be allowed in every sector of the economy
like area of national importance.
Gandhian Economic order is based on co-operation equality, human values self

sufficient village, nationalisation of basic industries & theory of
trusteeship.
• A socialistic economic system is characterised by social ownership and
democratic control of means of production.
• Capitalist system : It is the system where means of production are owned by
private individuals profit is main motive & there is no interference by the
Govt in the economic activity.
42. (b) The Human Development Index (HDI) is a composite statistic of life
expectancy, education, and income used to rank states. Among the given
states Kerala was having the highest Human Development Index around
0.92 in the year 2012 for achieving highest literacy rate, quality health
services and consumption expenditure of people.
Latest HDI of Indian state - Kerala - Highest (0.797)
- Chhattishgarh lowest (NA)
43. (d) In the year 2006 – 07, the Indian economy has witnessed highest growth
rate in GDP. The economy grew by 7.7 %.
Highest growth rate GDP - in 2010 (10.26%)
44. (c) The economy of India had undergone significant policy shifts in the
beginning of the 1990s. This new model of economic reforms is commonly
known as the LPG or Liberalization, Privatization and Globalization
model. LPG model of economic development in India was proposed by Dr.
Manmohan Singh, economist and finance minister at that time.
45. (c) The Concurrent List or List-III is a list of 52 items given in Part XI of the
Constitution of India, concerned with relations between the Union and
States. Economic planning is specified in Concurrent list.
46. (c) The concept of Economic planning in India is derived from Russia.
47. (a) The Twenty Point Programme was initially launched by Prime Minister
Indira Gandhi in 1975 and was subsequently restructured in 1982 and
again on 1986. With the introduction of new policies and programmes it
has been finally restructured in 2006 and it has been in operation at
present. The basic objective of the 20-Point Programme is to eradicate
poverty and to improve the quality of life of the poor and the under
privileged population of the country.
48. (d) Planning was considered for balanced socio-economic development to
focus on removal of regional disparities and maximizing the utilization of
available resources.
49. (c) The Second Five Year Plan heralded in a true sense the Socialist Project of
the then Prime Minister, Jawaharlal Nehru. The economic policies of
Nehru were heavily influenced by the erstwhile Union of Soviet Socialist
Republics (USSR) which had followed the path of speedy industrialisation

to expand the manufacturing base of its economy. The Second Five year
Plan focused mainly on heavy industry as against the First Plan which was
essentially an agricultural plan. This was done to boost domestic
production and manufacturing of goods. Third plan aimed to achieve self-
sufficiency in foodgrains and to increase agricultural production to meet
the requirements of industry and exports.
50. (d) The Governments objective of inclusive growth can be furthered by
promoting self help groups, promoting micro, small and medium
enterprises and implementing the right to education. This will improve
employement opportunities, increase GDP etc.
51. (d) The economy of India had undergone significant policy shifts in the
beginning of the 1990s. This new model of economic reforms is commonly
known as the LPG or Liberalization, Privatization and Globalization
model. LPG model of economic development in India was proposed by Dr.
Manmohan Singh, economist and finance minister at that time under the
PV Narashimha Rao Government in 1990.
52. (c) The economy of India had undergone significant policy shifts in the
beginning of the 1990s at the time of eighth plan. This new model of
economic reforms is commonly known as the LPG or Liberalization,
Privatization and Globalization model. LPG model of economic
development in India was proposed by Dr Manmohan Singh, economist
and finance minister at that time. Moreover the Eighth plan envisaged an
annual average growth rate of 5.6% but real growth rate was 6.8%.
53. (c) The planning of India derives its objectives and social premises followed
by the Directive Principles of State Policy. The Directive Principles of
State Policy are guidelines to the central and state governments, to be kept
in mind while framing laws and policies. These provisions, contained in
Part IV of the Constitution of India, are not enforceable by any court, but
the principles laid down therein are considered fundamental in the
governance of the country.
54. (b) Indicative planning is a form of economic planning implemented by a state
in an effort to solve the problem of imperfect information in market and
mixed economies in order to increase economic performance. Regarding
the indicative planning, state sets broad parameters and goals for the
economy and the targets to be achieved are broadly set by the state.
55. (b) In the first Five Year Plan, the actual GDP growth rate was more than the
targeted growth rate.
56. (a) LPG model of economic development process in India involves
disinvestment of profit making public sector enterprises, permitting private
sectors to establish industrial units without taking a licence and chronically

sick industries were referred to BIFR for the formulation of revival or
rehabilitation.
57. (c) Indicative planning is peculiar to the mixed economy. In a mixed economy,
the public and private sectors work together. In indicative planning the
private sector is neither rigidly controlled nor directed to fulfill the targets
and priorities of the plan. The state provides all types of facilities to the
private sector but does not direct it, rather indicates the areas in which it
can help in implementing the plan. Under imperative planning all
economic activities and resources of the economy operate under the
direction of the state. There is complete control over the factors of
production by the state. There is no consumer’s sovereignty in such
planning.
58. (d) Physical planning refers to the allocation of resources in terms of men,
materials and machinery. In physical planning, an overall assessment is
made of the available real resources such as raw materials, manpower, etc.,
and how they have to be obtained so that bottlenecks may be eliminated
during the plan. Physical planning requires the fixation of physical targets
with regard to agricultural and industrial production, socio-cultural and
transportation services, consumption levels and in respect of employment,
income and investment levels of the economy. Physical planning has to be
viewed as an overall long-term planning rather than a short-term piecemeal
planning.
Financial planning refers to the technique of planning in which resources are
allocated in terms of money. Financial planning is essential in order to
remove maladjustments between supplies and demand and for calculating
costs and benefits of the various projects. Thus, Financial planning is
thought to secure a balance between demands and supplies, avoid inflation
and bring about economic stability.
59. (d) Agriculture (crops) and allied sectors are like forestry, logging and fishing.
Food processing is not included in the Agriculture and allied services of
Indian Economy.
60. (d) Agriculture is the pillar of the Indian economy because of its high share in
employment and livelihood creation.
Agriculture and allied activities are largest contributor to GDP accounting for
27% of the total economy.
61. (c) Agriculture and Allied sectors contribute less than 20% around 17% of
Gross Domestic product of India. Around 60% of net sown agricultural
area of India is depended on rainfall.
62. (b) Per capita income, also known as income per person, is the mean income
of the people in an economic unit such as a country. Per capita income is
often used to measure a country’s standard of living.
Poverty Ratio : Ratio of number of people whose income falls below
poverty sine, taken as half the medium house hold income of total
population.
National Income : Total amount of money earned within a country.
Unemploye rate : It is defined most basically as the percentage of total
labour force that is unemployed but actively seeking employment and
willing to work.
63. (a) The Atkinson index is a measure of income inequality developed by
British economist Anthony Barnes Atkinson. The measure is useful in
determining which end of the distribution contributed most to the observed
inequality.
64. (a) The economy of the France is the world’s largest single national economy.
It has the highest percentage of the services sector in the GDP equivalent
to 79.8%.
Service sector percentage for India is 56.9%
65. (b) A greater proportion of the population is between age 20 and 30.
66. (d)
NIFA = GNP-GDP
NIFA : refers to the net flow of property income to and from the rest of world
plus the net flow of compensation of employer.
67. (d) The most appropriate measure of the country’s economic growth is its “per
capita real income” which is also denoted as NNP at factor cost
population.
68. (c)
69. (a) HDI is the geometric mean of (i) Life Expectancy Index (LEI), Education
Index (EI) and Income Index (II).
(where 20 and 82.3 are the minimum and maximum values of expectancy of life
at birth in years).
where MYSI (Mean Years of Schooling Index)
EYSI (Expected Years of Schooling Index)
(100 and 107721 are the minimum and maximum values of Per Capita Gross
National Income in US $).
70. (b) Statement 2 is correct as it comes under the perview of non-
resident/International resident.
71. (a) Negative Inflation is decrease in price level and economic growth is
defined as GDP rise. A decrease in inflation means the prices has fallen.
So, there is increase in purchasing power of money. It is increased
consumption therefore GDP increases.
72. (d) National Income ignores sale of land.
73. (a) Typically, higher inflation is caused by strong economic growth. If
Aggregate demand in an economy expanded faster than aggregate supply,
we would expect to see a higher inflation rate. If demand is rising faster
than supply, then this suggests that economic growth is higher than the
long run sustainable rate of growth.
74. (b) The effect of a government surplus upon the equilibrium level of NNP
(Net National Product) is substantially the same as an increase in
consumption.
75. (c) Share of food in total consumption expenditure has been coming down as
per capita income grew over time in last sixty years because growth in
food per capita income expenditure has been lower than growth in other.
76. (a) The sum of a nation’s gross domestic product (GDP) plus net income
received from overseas. Gross national income (GNI) is defined as the sum
of value added by all producers who are residents in a nation, plus any
product taxes (minus subsidies) not included in output, plus income
received from abroad such as employee compensation and property
income.
77. (a) National product at factor cost is equal to net domestic product at factor
cost+ Net factor Income from Abroad.
78. (b) The first person to adopt a scientific procedure in estimating the national
income was Dr. V.K.R.V Rao in 1931.
79. (a) During first Five Year Plan (1951–56) the price level in Indian economy
showed a decline because of rapid agricultural development and measures
to control inflation as there was disequilibrium due to second world war

and partition of economy.
80. (d) The National Development Council (NDC) or the Rashtriya Vikas Parishad
is the apex body for decision making and deliberations on development
matters in India, presided over by the Prime Minister. The functions of the
Council are to prescribe guidelines for the formulation of the National
Plan; to consider the National Plan as formulated by the NITI Aayog; to
consider important questions of social and economic policy affecting
national development; and to review the working of the Plan from time to
time and to recommend such measures as are necessary for achieving the
aims and targets set out in the National Plan.
81. (c) The slogan of ‘poverty abolition’ was given by Indira Gandhi in 1971 and
it was implemented during the Fifth Five Year Plan 1974–79. Gandhi
promised to reduce poverty by targeting the consumption levels of the poor
and enact wide ranging social and economic reforms.
nd
2 plan - ‘Socialist pattern & life’
4th plan - ‘Garibi Hatao’
6th plan - ‘‘Rolling plan’ taken from Japan coined by Gunnar Myrdal.
82. (a) Under the Third Five Year Plan, the government introduced an agricultural
strategy which gave rise to green revolution in India. Under the Third Plan
the goal was to establish self reliance and self generating economy.
83. (a) The major emphasis in the First Five Year plan was on the agriculture
sector. At the time of first plan (1951–56), India faced severe food shortage
and inflation. Accordingly the first plan emphasized on rapid agricultural
development so as to achieve food self sufficiency and control inflation.
Target Growth rate was 201% annual GDP Achieved growth Rate was 3.6% &
the Net domestic product went up by 15%.
84. (b) The Fourth Five-Year Plan is also called “Gadgil Yojana”. The aim of this
plan was to make the economy independent and to reach self active take
off position. It was named after the then deputy chairman of the Planning
Commission Dr. D R Gadgil.
85. (b) Due to miserable failure of 3rd plan, the govt was forced to declare plan
holidays (from 1966-67, 1967-68, 1968-69), the target growth rate was
5.6%, but the actual was 2.4%.
86. (c) The service sector experienced the fastest expansion during the plan in
India which was predominantly an agricultural economy at the time of
independence. It includes: telecommunication, hospitality
industry/tourism, mass media, healthcare/hospitals, information
technology, banking, insurance, investment management, accountancy,
legal services, consulting, retail sales, real estate, education. currently
maximum contribution to national income comes from service sector

which contributes around 60%.
87. (b) The National Development Council (NDC) or the Rashtriya Vikas Parishad
is the apex body for decision-making and deliberations on development
matters in India, presided over by the Prime Minister. The National
Development Council is the final authority to adopt the Five Year Plan for
the country.
88. (c) Faster and more inclusive growth is the theme of the approach paper of the
Eleventh five year plan. The Inclusive growth in eleventh plan has the
objectives of increasing GDP, Agricultural GDP, Increasing work
opportunities, developing education, providing clean drinking water,
reducing malnutrition, increasing energy efficiency, healthcare facilities
,road connectivity, broadband connectivity to villages, increasing forest
etc.
89. (b) Sixth five year plan started in 1980-85 marked the beginning of economic
liberalization in India. In Sixth Five year plan, a shift in pattern of
Industrialisation with lower emphasis on the heavy industry and move on
infrastructure begins.
90. (c) During The eleventh plan (2007-12) the food grain production steadily
increased and the average inflation on the wholesale price Index was above
10%.
91. (b) Under the third five year plan, the government introduced an agricultural
strategy which gave rise to green revolution in India. Under the third plan
the goal was to establish self reliance and self generating economy.But the
earlier plans had shown that the agricultural production was the limiting
factor; so agriculture was given top priority.
92. (d) The Mahatma Gandhi National Rural Employment Guarantee Act
(MNREGA) is an Indian law that aims to guarantee the ‘right to work’ and
ensures livelihood security in rural areas by providing at least 100 days of
guaranteed wage employment in a financial year to every household whose
adult members volunteer to do unskilled manual work. MNREGA was
launched in 200 select districts in 2006. However Indira Awas Yojana was
lauched in the Year 1996.
93. (b) In the fifth five year plan, the concept of ‘minimum needs’ and directed
anti-poverty programmes were innovated. The Minimum needs
Programme aimed to establish a network of basic services to raise living
standards and in reducing the regional disparities in development. The
basic needs of the people identified for this programme are Elementary
Education, Adult Education, Rural Health, Rural Roads, Rural
Electrification, Rural Housing. Moreover, it was during the plan, slogan of

‘Garibi hatao’ was given to remove poverty.
94. (d) In the 11th Five Year Plan, the growth rate of the agriculture sector was
3.3% and the agriculture sector contributed 15.2 % in the overall GDP of
the country. Thus Both the given statements regarding the 11th Five Year
Plan are not correct.
95. (c) The Ninth Five Year Plan was launched in the 50th year of India’s
independence. Under the plan for the first time in the Indian Economy the
GDP growth rate was set at 7%.
96. (c) The Twelfth Five Year Plan approved by the government aims to sustain
the inclusive growth which started in 11th plan. 12th Five Year Plan is
from 2012 to 2017 and it aims to grow GDP at the rate of 9%.
97. (b) Regarding the 11th Five Year Plan, in the middle of the plan, the import
growth was negative due to external factors and the growth rate of the
export was negative during certain periods.
98. (c) First plan – agriculture, Irrigation and power projects
Third Plan – self reliance and generating economy
Fifth Plan – growth with social justice
Twelfth plan – sustainable inclusive growth
99. (c) Jawahar Rozgar Yojna was launched on April 1, 1989 by merging National
Rural Employment Program (NREP) and Rural Landless Employment
Guarantee Programme (RLEGP). In Seventh Five Year Plan the small-
scale and food processing industries were given new impetus as the plan
laid stress on improving the productivity level of industries by upgrading
technology.
100. (b) Despite big investments during the first three Plans the living standards of
the poor could not be raised and poverty and inequity in distribution of
state resources remained stark. Consequently, the period between 1966 and
1969 marked the shift from a ‘growth approach’ to a ‘distribution from
growth approach’. Looking at the failures and pitfalls the planners
suspended the impending Fourth Plan, which was due in 1966, until 1969
for a revision of objectives and targets. This was called as the ‘Plan
Holiday’ extending from 1 April 1966 to 31 March 1969.
101. (d) The Fourth Five Plan was formed for the years 1969 to 1974. It was the
first plan that the government of Ms Indira Gandhi launched. The plan was
put forward when the country was under the pressure of inflationary
recession and devaluation. The plan aimed for a 5.5 percent growth but
ended up achieving a mere 3.3 percent growth.
102. (a)
103. (c) During the Eighth Five Year Plan, the Indian Economy adopted the
indicative planning model. Indicative planning is a form of economic
planning implemented by a state in an effort to solve the problem of
imperfect information in market and mixed economies in order to increase
economic performance. When utilizing indicative planning, the state
employs “influence, subsidies, grants, and taxes.
104. (b) Fifth FYP was launched and planned for the period 1974-79 but Janata
Government came in power in 1978 and terminated the plan prematurely
in 1978. The Janata government launched sixth FYP for period 1978-1983.
Congress government when came in power in 1980 abandoned the sixth
FYP and launched a new sixth FYP for period 1980-1985.
105. (c) National Bank for Agriculture and Rural Development (NABARD) is an
apex development bank in India having headquarters in Mumbai. It was
established on 12 July, 1982 in sixth five year plan by a special act by the
Parliament and its main focus was to uplift rural India by increasing the
credit flow for elevation of agriculture and rural non-farm sector.
106. (c) The fourth five year plan was affected by the immigration of a huge
population from Bangladesh. It was affected since the situation in East
Pakistan was really tense and the funds actually allocated for the industrial
development were taken up to wage the Indo-Pakistani war and the
Bangladesh Liberation War.
107. (c) The Ninth Plan treats education as the most crucial investment in human
development. The plan had the national goal of providing primary
education as a universal basic service, and the Supreme Court also
declared education to be a fundamental right for children upto 14 years of
age
108. (c) The Hindu rate of growth is a derogatory term referring to the low annual
growth rate of the planned economy of India before the liberalizations of
1991, which stagnated around 3.5% from 1950s to 1980s, while per capita
income growth averaged 1.3%. The term was coined by Indian economist
Raj Krishna.
109. (d) In Tenth year five plan: the target for the crop. function were not fixed for
the first time
110. (c) The growth performance of the agriculture sector has been fluctuating
across the plan periods . It witnessed a growth rate of 4.8 per cent during
the Eighth plan period (1992–97).
111. (a) The growth performance of the agriculture sector has been fluctuating
across the plan periods. It witnessed a growth rate of 4.8 per cent during
the Eighth plan period (1992–97).
112. (c) According to the Second Five Year Plan the priorities were given in the
production of iron and steel and heavy engineering and also to strengthen
the oil exploration and coal.
113. (b) The Fifth Five Year Plan (1974-79) had a high priority to bring inflation
under control and to achieve stability in the economic situation.
114. (c) The third five year plan (1961-1966) had objective to increase wheat
production and other agricultural products.
115. (c) The Fourteenth Finance Commission wants the states to share a larger
fiscal responsibility for the implementation of the scheme.
116. (c) A. First Five Year Plan (1951-56)- Agriculture and community
development
B. Second Five Year Plan (1956-61)- Heavy Industry
C. Fifth Five Year Plan (1974-79)- Removal of Poverty
D. Ninth Five Year Plan (1997-2002)- Food Security and woman empowerment
117. (d) The government had selected three think tanks in March 2011 in order to
estimate the quantum of black money. These three think tanks are -
National Institute of Financial Management (NIFM), National Council for
Applied Economic Research (NCEAR) and National Institute of Public
Finance and Policy (NIPFP).
118. (b) The Competition Act, 2002 prohibits anti-competitive agreements, abuse
of dominant position by enterprises and regulates combinations
(acquisition, acquiring of control and Merger and acquisition), which
causes or likely to cause an appreciable adverse effect on competition
within India. Competition Commission of India was established on 14
October 2003 and became fully functional in May 2009. It is a body of the
Government of India responsible for enforcing the Competition Act, 2002
throughout India and to prevent activities that have an adverse effect on
competition in India
119. (c) Inclusive growth is a phrase used in India for 11th (2007-2012) and 12th
(2012-2017) Five year plans.
120. (a)
121. (a) As per report of the working group on animal husbandary and dairying -
11th 5 year plan, the livestock sector employs 8% of the country’s labour
force.
122. (b) The Second Plan was particularly in the development of the public sector.
The plan followed the Mahalanobis model, an economic development
model developed by the Indian statistician Prasanta Chandra Mahalanobis
in 1953.
123. (b) Agriculture sector grew by an average 1.6 per cent per annum in first four
years of the ongoing Five Year Plan (2012-17) as against the targeted 4 per
cent annual growth due to lower production.

124. (a) The First Five-year Plan was launched in 1951 which mainly focused in
development of the primary sector, and was based on the Harrod–
Domar model with few modifications.
125. (d) Suppose three people work in farm, produce 200 kg wheat. If one of them
is removed, still farm produces 200 kg wheat. That is disguised
unemployment marginal productivity is zero.
126. (a) To rip maximum demographic dividend, India has to promote skill
development.
127. (c)
128. (b) Disguised unemployment in India exists in agricultural sector.
Disguised unemployment exist where part of labour force is either left without
work or working in a redundant manner where worker productivity is
essentially zero.
129. (a) Prof. Tendulkar’s pioneering contribution was his extensive work on
poverty and estimation of people below poverty line (BPL). A committee
was formed by government of India in 2009, with Tendulkar as Chairman
to ‘report on methodology for estimation of poverty’. In 2009, this
committee came out with a new method to calculate poverty.
130. (d) The poverty ratio was highest in Chhattisgarh at 39.93 per cent followed
by Jharkhand (36.96 per cent), Manipur (36.89 per cent), Arunachal
Pradesh (34.67 per cent) and Bihar (33.47 per cent). As per 2011-12 data.
The minimum poverty ratio was 5.09%.
National Average of all states of India was 21.92%
Poverty ratio : The ratio of the no. of people whose income falls below
the poverty line, taken as half the median household income of the total
population.
131. (b) According to the data studied by Planning Commission in 2011–12, 21.9%
of the population of India falls under the poverty line.
132. (b) In Indian economy the sectors from highest to lowest in terms of
employment are agriculture sector around 50%, service sector around 35%
and Industrial sector.
133. (d) Phillips curve is a historical inverse relationship between the rate of
unemployment and the rate of inflation in an economy. Philip’s curve
stated that the lower the unemployment in an economy, the higher the rate
of inflation.
Gibrat’s law: It is rule defined by Gibrat in 1931 stating that the
proportional rate of growth of a form in independent of absolute size.
Verdoorn’s law: It is rule which states that in the long run productivity
generally grows proportionally to the square root of output.
134. (c) A Beveridge curve, or UV-curve, is a graphical representation of the

relationship between unemployment and the job vacancy rate (the number
of unfilled jobs expressed as a proportion of the labour force). It typically
has vacancies on the vertical axis and unemployment on the horizontal.
The curve is named after William Beveridge.
Friedman’s Curve : It is a graph that obstetric care provides have traditionally
used to define a normal length and Pace of labour.
135. (a)
136. (c) The long-run Phillips curve is now seen as a vertical line at the natural rate
of unemployment, where the rate of inflation has no effect on
unemployment.
137. (c) Tendulkar adopted the Cost of living as the basis for identifying poverty. It
was also accepted by the panel under the leadership of Arvind Panagariya,
Constituted by the Govt. in September 2016. However This Panel
suggested the Govt. to constitute another panel to define poverty.
138. (b) According to Prof. Nurkse, Vicious Circle of Poverty implies circular
constellation of forces tending to act and react one another in such a way
as to keep a poor country in a state of poverty.
139. (d) Planning commission is the nodal agency for estimation of poverty at the
national and state levels and the surveys are normally conducted on
quinquennial basis.
140. (c) Dr. V. M. Dandekar and Mr. Nilkantha Rath, B.S. Minhas and Dr. P. K.
Bardhan studied about poverty in India.
141. (a) In India, agriculture, forestry and logging, fishing, mining and quarrying,
registered manufacturing and construction units are included in category
A. The output method is applied to category A. The value added by this
category is found by subtracting the value of raw materials and other
inputs from the aggregate of commodity-wise output.
Expenditure Method-This method measure National income sum total of
final expenditure incurred by household, business firm, Govt. &
Foreigners.
Commodity flow method - This method is used to estimate purchase of
commodity by intermediate or final users. This method generally begins
with an estimate of the total supply of a commodity available for domestic
users.
142. (c) Statement 1 lists all the main and primary sources of agricultural credit
institutions exclusively for farmers.
143. (d) The Green Revolution in India was a period where Agriculture in India
increased its yield due to improved agronomic technology, the main
development was higher yielding varieties of wheat.
144. (d) The Green Revolution in India has contributed to inter-regional, inter-class
and inter-crop inequality as certain regions like UP and Punjab which used
HYVs performed much better than others and become more advanced than
other states.
145. (d) The importance of agriculture in Indian Economy is indicated by its
contribution to national income, industrial development and supply of
foodgrains. It contributes around 13.7% to GDP, supplies raw material for
development of industries along with supplying food grains for livelihood.
Agriculture plays a vital role in the Indian economy over 70% of the rural
households depend upon Agricultural. Agriculture in an important sector
of Indian economy as it contributes about 17% to the total GDP and
provide employment to over 60% of population.
146. (b) Indian Farmers Fertilizer cooperative Ltd (IFFCO) is the co-operative
society responsible for the production of fertilizers. IFFCO was registered
on November 3, 1967 as a Multi-unit Co-operative Society.
NCDC : National Co-operative Development Co-operation was
established by the Act of parliament in 1963 as a statutory co-operation
under the ministry of Agriculture.
147. (d) The introduction of high-yielding varieties of seeds and the increased use
of chemical fertilizers and irrigation are known collectively as the Green
Revolution. The impact of the Green Revolution was felt most in the
production of wheat. India saw annual wheat production rise from 10
million tons in the 1960s to 73 million in 2006.
148. (a) The Blue Revolution is similar to the green revolution as it deals with
aquaculture, fish and water preservation for human use.
Blue Revolution Fish Production
Green Revolution - Food grains
White Revolution - Milk production
Yellow Revolution - Oil seed production
149. (b) Guranteed maximum prices have not been a component of the agriculture
strategy that brought about the Green Revolution. The strategy aimed at
increasing the yield of crops using fertilizer, pesticides and high yielding
varities in agriculture.
150. (d) The term ‘Green Revolution’ has been used to indicate higher production
through enhanced agricultural productivity per hectare.
New agricultural techniques were introduced as a package programme to include
high yielding variety seeds, fertilizers and pesticides.
151. (d) Agriculture, dairy, horticulture and related occupations alone employ 52
percent of labour in India.
152. (d) The Commission for Agricultural Costs & Prices (CACP) came into
existence in January 1965. Minimum Support Price (MSP) is a form of
market intervention by the Government of India to insure agricultural
producers against any sharp fall in farm prices. The minimum support
prices are announced by the Government of India at the beginning of the
sowing season for certain crops on the basis of the recommendations of the
Commission for Agricultural Costs and Prices (CACP).
153. (d) Yellow revolution refers to the production of oil seeds.
154. (a) During 2002-03, average growth rate of agriculture and allied sectors
negative.
155. (d) Marine Product was the highest in value among export items of
agricultural and allied products from India during the year 2005-06.
156. (a) Green revolution’s main focus was on the production of only 2 cereals
wheat and rice.
157. (a) Pink revolution - Onions/prawn.
158. (d) Gray revolution - Fertilizers.
159. (a) The union government has constituted a national rain fed area authority on
3rd Nov, 2006 to give focused attention to the problems of rain fed area of
country, It’s manadate is water than mere water conservation and covers all
the aspects of sustainable and holistic development of rainfed areas,
including appropriate farming and livelihood system approach.
160. (d) On January 21, 2004 the Department of Agriculture, Cooperation and
Farmer’s welfare, Ministry of Agriculture, Govt. of India established Kisan
Call Centers across the country to deliver extension services to the farming
community. The aim is to respond in the local language to the problems
faced by farmers.
A farmer from any part of the sale can contact the kisan call center counter by
dialing toll free no. 1551 or 1800-180-1551 and present their problems
related to farming.
161. (b) The Directorate of Marketing and Inspection (DMI) headed by the
Agricultural Marketing Advisor, Department of Agriculture & Co-
operation (DAC) implements agricultural marketing policies and
programmes of the Government of India. It undertakes: Standardisation,
Grading and Quality Control of Agricultural and Allied produce, Market
Research and Surveys along with other functions.
162. (c) The union government fixes the statutory minimum price of sugarcane for
each sugar season. Sugar and sugarcane are essential commodities under
the essential commodities Act. So both statements are correct.
163. (c) Livestock contributes 25 per cent of gross value added in the agriculture
sector and provides self-employment to about 21 million people. Growth
of livestock output averaged 4.8 per cent per annum during the Eleventh
Plan recovering from an average of 3.6 per cent in the Ninth and theTenth
Plans.
164. (d) The importance of agriculture in Indian Economy is indicated by its
contribution to national income, industrial development and supply of
foodgrains. It contributes around 13.7% to GDP, supplies raw material for
development of industries along with supplying foodgrains for livelihood.
165. (d) Regarding to minimum support price neither of the statements given above
is correct. In order to help the farmers in getting remunerative prices for
their produce with a view to encourage higher investment and also to
increase production and productivity of a commodity, Government of India
declares Minimum Support Price (MSPs) for 25 notified agricultural
commodities for each Kharif and Rabi crop. Moreover, the common paddy
does not has higher minimum support price than the paddy Grade-A.
166. (a) In the given statements, India is meeting 85% of the urea fertilizer through
indigenous production is correct. However, we are deficient in phosphatic
and potassic resources and around 90% is imported.
167. (a)
168. (a) Rural Infrastructure Development Fund (RIDF) was instituted in
NABARD with an announcement in the Union Budget 1995-96 with the
sole objective of giving low cost fund support to State governments and
state owned corporations for quick completion of ongoing projects relating
to medium and minor irrigation, soil conservation, watershed management
and other forms of rural infrastructure.
169. (b) The Blue Revolution is similar to the Green Revolution only that it deals
with aquaculture, fish and water preservation for human use.
170. (c) The growth in Agriculture and Allied sectors is a necessary condition for
inclusive growth in India.Agriculture including Allied activities accounted
for about 55% employment in the country according to census 2011.
171. (c) National Cooperation Marketing Federation of India Limited (NAFED)
promotes cooperative marketing, promotes the inter-state trade as well as
export of certain agricultural commodities to many foreign countries. It is
responsible in stabilizing prices of commodities and thus responsible for
the movement of the essential commodities from surplus areas to scarcity
areas.
172. (a)
173. (c) The area under foodgrains has declined in the last two decades and the
average farm size in the country is very small and declining over the years.
174. (c) The Indian dairy sector has acquired substantial growth momentum from
the Ninth Five-Year Plan onwards, as a result of which the country now
ranks first among the world’s milk producing nations. The per capita
availability of the milk has reached a level of 337g per day in the year
2017, which is more than the world average of 229g per day.
175. (a) The Commission of Agricultural Costs & Prices (CACP since 1985, earlier
named as Agricultural Prices Commission) came into existence in January
1965. It is mandated to recommend minimum support prices (MSPs) to
incentivize the cultivators to adopt modern technology, and raise
productivity and overall grain production in line with the emerging
demand patterns in the country.
176. (c) These exports have marked a growth of 0.8 in the year 2012-13. Recently
India has diversified its export basket for these products.
177. (a) Milk and milk products, exhibited high rates of inflation recently. Pulses,
MFE, and milk and milk products which together constituted around 30
per cent of the total food expenditure in 2009-10 (2004-05=100, as per the
66th NSSO Round) were responsible for around 42 per cent of food
inflation during the latter period. This signifies that protein sources of
food, both plant and animal, have emerged an important driver of food
inflation in recent period.
178. (b) A study conducted in 2014 found that there are three specific
characteristics associated with high risk farmers: “those that grow cash
crops such as coffee and cotton; those with ‘marginal’ farms of less than
one hectare; and those with debts of 300 Rupees or more.” The study also
found that the Indian states in which these three characteristics are most
common had the highest suicide rates and also accounted for “almost 75%
of the variability in state-level suicides.
179. (b)
180. (b) Rapid rate of increase of population and practice of dividing land equally
among the heirs are responsible for the decrease of per capita holding of
cultivated land in India.
181. (d) Livestock sector employs 8% of the total labour force of India. It includes
many small and marginal families, women and landless agricultural
workers. Out of the total agricultural GDP, livestock sector contributed
about 27% during financial year 2012-13.
182. (b) Bharat Nirman is an Indian business plan for creating and augmenting
basic rural infrastructure. It comprises projects on irrigation, roads
(Pradhan Mantri Gram Sadak Yojana), housing (Indira Awaas Yojana),
water supply (National Rural Driniking Water Programme), electrification
[Rajiv Gandhi Grameen Vidyutikaran Yojana and telecommunication
connectivity.
183. (d) Buffalo meat was the single largest item exported during the period (Up to
Feb. 2015) with the value of US $ 4410103663.
184. (c) During last decade, tertiary sector has shown remarkable expansion. In the
last decade India has expanded maximum in providing services like IT,
Telecommunication, Healthcare, Tourism which is contributing around
60% to GDP.
Primary Sectors - Primary activities are those which are based on natural
resource. It is called Agriculture sector.
Examples - Types of crops, live stock rearing dairy farming, fishing,?
Secondary Sectors - Secondary sector follows primary activities in which
the natural products are changed to manufacture. It is called Industrial
sector.
Tertiary Sector - Activities that assist the development of primary and
secondary sectors are carried out. Generally services are involved like
doctors, teachers, lawyers, administrators. New services like IT, software
company etc. have become important Tertiary activities.
185. (c) When development in economy takes place, the share of tertiary sector in
national income keeps on increasing because tertiary sector is involved
into services within and outside the country. With development the
disposable income of individuals income results in growth of banking,
trading, communication etc., both domestically and internationally.
186. (b) The service sector consists of activities where people offer their knowledge
and time to improve productivity. Examples of tertiary industries may
include the following: telecommunication, hospitality industry/tourism,
mass media, healthcare/hospitals, information technology, banking,
insurance, investment management, accountancy, legal services,
consulting, retail sales, real estate, education.
Service Sector - It produces intangible goods, more precisely services
instead of Goods.
187. (d) Dadabhai, known as the Grand old man of India, wrote the book ‘Poverty
and Un-British Rule in India’ describing the theory of economic drain of
India during British rule.
188. (c) As the economy develops, the share of the tertiary sector in the GDP
increases. As economy develops people develop more skills and
knowledge which they offer as services.
189. (c) The slack season in the Indian economy is Jan- June.
190. (d) The small-scale industries sector plays a vital role in the growth of the
country. It contributes almost 40% of the gross industrial value added in
the Indian economy.
191. (c) The Millenium Development Goals focus on developing countries. There
is one exception : MDG number 8 on developing a global partnership for
development, which includes commitments for developed countries to help
developing countries. An important difference is that the sustainable
Development Goals are meant to apply to all countries, including
developed countries.
Another difference is that the sustainable Development Goals are explicitly
meant to include the three dimensions of sustainable development
economic, social and environmental.
192. (d) Quaternary sector is characterized by the intellectual persons or individuals
or group of individual. It includes the research and development activities.
Mining and quarrying and fishing are concerned with primary sector
activities.
193. (c) The growth of wire line telephone connections in the last five years are
decreasing every year due to increase in mobile connections. Moreover, the
share of private operations in the wireless telephone is more than 85%. So,
the both statements are correct.
194. (c) “Udyog Bandhu” is an organization of the State Government of Uttar
Pradesh. It assists industrial units in solving time bound establishment and
investment related problems relating to existing and up-coming industries
as well.
195. (d) ASSOCHAM
Head Quarter : New Delhi, President : Sunil Kanoria
R. Shivakumar has been appointed as the chairman of ASSOCHAM.
Chanda Kochar : MD & CEO of ICICI Bank.
196. (c) NASSCOM is the organisation of companies of Information technology.
NASSCOM : It is a trade association of Indian Information Technology and
Business process outsourcing Industry.
197. (a) Software major Infosys Technologies is included in the coveted Nasdaq-
100 Index. This is the first time that an Indian company has found a place
in a stock index outside the country.
198. (b) In February 2007, a “Package for Promotion of Micro and Small
Enterprises” was announced. This includes measures addressing concerns
of credit, fiscal support, cluster-based development, infrastructure,
technology, and marketing. Capacity building of MSME Associations and
support to women entrepreneurs are the other important attributes of this
package.
199. (d) The Electronic industry is responsible for generation of employment.
Bangalore is the hub of electronic industry in the country and is called the
electronic city. There are approximately 200 IT/ITES companies located in

Electronics City which have employed many unemployed in various fields.
200. (d) Tamil Nadu has the highest number of women entrepreneurs with 2930
women equalling to 30.36 %.
201. (c) Crude oil is the basic raw material upon which all refinery processes are
founded.
Raw material oriented industries those industries that are having their locations
stick close to source of raw material.
“Raw material” denotes materials in minimally processed or unprocessed
in states e.g. raw later, crude oil, cotton, coal etc
Sugar Industry: It subsumes the production processing and marketing of
sugar.
Light Engineering Industry: It is one of the largest sequent of the overall
industrial growth of a nation.
202. (c) In 2007, Novelis was acquired by Hindalco Industries Limited, another
veteran of the aluminium business. Hindalco is the flagship company of
the Aditya Birla Group of companies, a multinational conglomerate
headquartered in Mumbai. Following the merger, Novelis became a wholly
owned subsidiary of Aditya Birla Group. With the addition of Novelis,
Hindalco became the world’s largest aluminium rolling company and one
of the biggest producers of primary aluminium in Asia.
203. (d) Causes of slow growth
a. British rule
b. Lack of social mobility
c. Shortage of capital
d. Under developed capital market
e. Agrarian system
f. Decline of Indian Crafts
g. Lack of Indian infrastructure
h. Shortage of skilled labour
204. (a) HMT was founded in 1953.
HMT Machine tools offers a wide array of high technology tool machine tool
solution to cater every manufacturing requirement.
PMT Mechanical tools ltd. : largest machine tool manufacturing company in
India.
Pragatools ltd. : Established 1943 to manufacture machine tools with its head
quarter Secunderabad.
205. (d) The largest source of Revenue for Britishers in India was from Land
revenue. Three major system of land revenue collection existed in India
they were - Zamindari, Ryotwari and Mahalwari.
206. (b) Paper and Paper Board is a forest-based industry. In 1812 the first modern
paper mill of the country was set up at Serampore in West Bengal.
207. (a) Durgapur Steel Plant, SAIL, was set up with the British collaboration in
the late fifties with an initial capacity of one million tonnes of crude steel
per annum.
208. (a) Malanjkhand Copper Project was established in 1982. Initial project has
been set up by Hindustan Copper Ltd to exploit the copper ore through an
open pit mine.
Khetari Copper complex (1967): It is developed & mainted by Hindustan copper
ltd.
Indian copper complex (1930): Process plant to produce 19000 TPA of referred
copper.
Tajola copper project (1989): Plant to produce 60,000 TPA of continuous cast
wire rod.
209. (a) On August 10, 2005, a ‘Policy Package for Setting up Credit to Small and
Medium Enterprises’ was announced with the objective to double the
credit flow to the sector within a period of five years.
210. (d) GCIL—an American company of chemical sector has been acquired by
Tata Group.
211. (a) Bharti Airtel has acquired Zain Telecom’s African assets in a $10.7 billion
deal. The acquisition of Zain assets will give the Indian mobile market
leader a footprint in 15 African countries.
212. (d) The correctly matched pairs are : Mundra SEZ — Adani Group, CMC Ltd.
— Tata Group
IPCL — Reliance Group. However, Bharti is associated with Airtel.
213. (b) Reliance-Mukesh Ambani, Wipro-Azim Premji, Airtel- Sunil Bharati
Mittal and Nano Car-Ratan Tata. Wipro was established by Mohamed
Hasham Premji in 1945 as a vegetable manufacturer in Amalner,
Maharashtra.
214. (b) The correct locations of the given companies are :
BALCO — Korba
HINDALCO — Renukoot
Indian Aluminium Company — Hirakund
NALCO — Koraput
215. (d) The correct correlation of industries and their fields are :
Basic industry — petroleum
Strategic industry — Arms and Ammunition
Critical industry — Automobile
Goods based industry — Fertilizer
216. (b) In public sector of India there are basic and heavy industries. Employees
and their jobs are secured in public sector industries. However, all the
public sector companies are not profit-oriented. Some of them have been
established keeping in mind no profit no loss basis for the welfare of the
society.
217. (b) The National Renewal Fund (NRF), was set up in February 1992. It aims
to provide a social safety net to protect the workers in industrial enterprises
from possible adverse consequences of the new economic policy.
218. (d) The first notable attempt in steel industry in India was made in 1874 when
the Bengal Iron Works (BIW) came into being at Kulti, near Asansol in
West Bengal. The Bhilai Steel Plant, located in Bhilai, in the Indian state
of Chhattisgarh was set up with the help of the USSR in 1955. SAIL
Rourkela Steel Plant (RSP), located in Rourkela, Odisha is the first
integrated steel plant in the public sector in India, was set up with German
collaboration with an installed capacity of 1 million tonnes in 60s. Bokaro
Steel Plant is located in the Bokaro district of Jharkhand. It is the fourth
integrated public sector steel plant in India built with Soviet help in 1972 .
219. (a) Maruti views Tata motors as a prominent competitor but does not view
Volvo as a competitor. This type of competition in the market is knwon as
product competition because the companies are competing on the same and
similar products.
220. (d) Ashok Leyland, 2nd largest commercial vehicle manufacturer in India is a
Hinduja Group company. Hindalco is the world’s largest aluminium rolling
company belonging to A.V. Birla. Suzlon Energy Limited, is an Indian
multinational wind power company based in Pune, owned by Tulsi Tani.
221. (c) Tata Steel is Asia’s first privately owned integrated iron and steel plant. It
is the first company outside Japan to get the Deming Application Prize in
2008 for excellence in total quality management. Tata Steel started
provident fund for its employees as early as in 1920, however, it became a
law for all employers under the Provident Fund Act only in 1952.
222. (c) MMTC Ltd., Metals and Minerals Trading Corporation of India, is one of
the two highest earners of foreign exchange for India and India’s largest
public sector trading body. Neelachal Ispat Nigam Limited (NINL), is a
company promoted by MMTC Ltd, Industrial Promotion and Investment
Corporation of Odisha Limited (IPICOL).
223. (c) Navratna was the title given originally to 9 Public Sector Enterprises
(PSEs) identified by the government in 1997 as public sector companies
that have comparative advantages enjoying greater autonomy to compete
in the global market so as to support in their drive to become global giants.
However, the number of PSEs (Public Sector Enterprises) having

Navaratna status is now more than 15 industries.
224. (c) The first petrochemical industry in India was started with the establishment
of National Organic Chemical Industry Limited in 1961. The company
manufacture various organic and inorganic chemicals. The real thrust of
Petrochemical industry in India came with the establishment of Indian
Petrochemical Corporation Limited (IPCL) at Baroda on March 22, 1969,
with a view to promote and encourage the use of plastics in India.
225. (d) Hindalco industries : Novelis
Tata Steel : Chorus group
Jet airways : Air Sahara
Kingfisher Airlines: MDR Airlines
226. (c) Packaging machinery industry, like other industrial machinery is allowed
for 100%. FDI under automatic approval i.e., without prior approval either
of the government or the Reserve Bank of India.
Food processing machinery can be classified under the general category of
industrial machinery which is de-licensed under the current industrial
policy and qualifies for 100% FDI under automatic approval.
227. (a) Miniratna public sector enterprises can be a joint venture, set subsidiary
company or overseas office but with certain conditions i.e., Miniratna-I is
up to Rs. 500 crore or equal to their net worth, whichever is lower.
Miniratna-II: is up to ` 300 crore or up to 50% of their net worth,
whichever is lower. Till now there are more than 50 public sector
enterprises which have been given Miniratna status by the Indian
government.
228. (a) The Bhilai Steel Plant, located in Bhilai, in the Indian state of
Chhattisgarh, was set up with the help of the USSR in 1955. Bokaro Steel
Plant is located in the Bokaro district of Jharkhand. It is the fourth
integrated public sector steel plant in India built with Soviet help in 1972 .
229. (b) In India, in the overall index of industrial production, the indices of eight
core industries have a combined weight of 37-90%. Among those eight
core industries are cement, Fertilizers, Natural gas and Refinery products.
230. (c) A labour intensive industry, as the name suggests, refers to an industry
requiring a huge amount of human labour to produce industrial goods. In
such industries, the proportion of labour used is comparatively higher than
the proportion of capital.
231. (b) TISCO was founded in 1907 by Dorabji Tata. The Bhilai Steel Plant,
located in Bhilai, in the Indian state of Chhattisgarh, was set up with the
help of the USSR in 1955. Bokaro Steel Plant is located in the Bokaro
district of Jharkhand. It is the fourth integrated public sector steel plant in
India built with Soviet help in 1972. Visakhapatnam Steel Plant, popularly
known as Vizag Steel, is the most advanced steel producer in India with
the help of German and soviet technology founded in 1974.
232. (a) The first newsprint plant was set up in India at Nepanagar in 1948.
233. (c) The erratic trend in production of sugar is mainly due to monsoons and the
output of sugar is influenced by both cane and gur prizes.
234. (d) All the above industrial clusters and the related locations are correctly
matched. Tirupur is famous for textiles, Kishangarh is famous for marbles,
Surat is famous for Gems and Jewellery.
235. (c) In order to give impetus to hydro power growth in the country and to have
a balanced portfolio of power generation, NTPC entered hydro power
business with the 800 MW Koldam hydro project in Himachal Pradesh.
Two more projects have also been taken up in Uttarakhand.
236. (b) India stands at the 3rd position in the world in terms of production of
ceramic tiles.
237. (d) Sunrise industries are industries which have high growth potential and
meet future requirements of the economy.
238. (b) Per capita consumption of polymers products in the country during 2012-
13 was low at just 9.7 kg as compared to 109 kg in USA, 45 kg in China
and 32 kg in a Brazil. Thus India is not the highest consumer. The
petrochemical indusry in India gives a big boost to the small scale
industries is the correct statement.
239. (d) The recent policy initiative of Government of India to promote the growth
of manufacturing sector is setting up of National Investment and
manufacturing zones, providing the benefit of single window clearance and
establishing the technology acquisition and development.
240. (c) Container Corporation of India Ltd. (CONCOR) is a Navratna Public
sector undertaking under the Indian Ministry of Railways. Incorporated in
March 1988 under the Companies Act, CONCOR commenced operations
in November 1989 taking over an existing network of seven inland
container depots (ICDs) from Indian Railways. It now has a network of 61
ICDs/CFSs (Container Freight Stations) throughout India.
241. (b) The government has relaxed norms for giving Maharatna status to public
sector enterprises, a move that will benefit blue chip companies such as
Coal India, GAIL, BHEL and NMDC in their expansion plans. Only four
state-run companies --ONGC, SAIL, IOC and NTPC -- at present enjoy
the Maharatna status, which gives them the financial and managerial
autonomy to invest up to ` 5,000 crore in a new venture without seeking
government approval. Under the new norms, a company qualifying for the
Maharatna status should have an average annual turnover of ` 20,000 crore
during the last three years against ` 25,000 crore prescribed earlier.
Further, the criteria on average annual net worth has been relaxed to `
10,000 crore from the earlier limit of 15,000 crore.
242. (d) Industrial sickness can be identified by the following symptoms. These
symptoms act as leading indicators of sickness, and if immediate remedial
actions are not taken, the sickness will grow to the extent that the
organization will find its natural death. Continuous reduction in turnover,
Piling up of inventory, Continuous reduction of net profit to sales ratio,
Short term borrowings at high interest rate, Continuous cash losses leading
to erosion of tangible net worth etc. However, decline of market share is
not an immediate indicator.
243. (b) The LLP will be a separate legal entity, liable to the full extent of its assets,
with the liability of the partners being limited to their agreed contribution
in the LLP which may be of tangible or intangible nature or both tangible
and intangible in nature. No partner would be liable on account of the
independent or un-authorized actions of other partners or their misconduct.
The liabilities of the LLP and partners who are found to have acted with
intent to defraud creditors or for any fraudulent purpose shall be unlimited
for all or any of the debts or other liabilities of the LLP.
244. (c) Tiruppur is the “knitwear capital” of India. It has spurred up the textile
industry in India for the past three decades. It contributes to a huge amount
of foreign exchange in India. The city exports ` 120 billion worth of
goods. Netaji Apparel Park has 53 companies manufacturing knitwear for
exports. Each unit will be a model to answer the requirements of
international standards in all aspects. In addition to investment of 920
million on infrastructure and factory buildings about 3 billion is being
invested on machinery. The NAP presently provides employment to 15,000
people and generates export revenue of ` 15 billion from the apparels
produced in it. There are about 3000 sewing units, 1326 knitting units, 730
dyeing units and other ancillary units. Some of the world’s largest retailers
including C&A, Switcher SA, Walmart, Primark, Oviesse, Switcher, Polo
Ralph Lauren, Diesel, Tommy Hilfiger, M&S, FILA, H&M, Reebok
import textiles and clothing from Tirupur.
245. (b) The plastic park scheme envisages clusters of plastic industry operations
including small and medium-sized enterprises and recycling operations.
These parks will provide raw materials, power and land for plastic
companies. These parks are expected to generate huge direct and indirect
employment.
246. (a) All comes under the category of Maharatna.
247. (a) The government disinvests to meet the deficit in the budget.
Token privitisation or deficet privitisation of public sector units occurs when the
Govt. sells 5% of shares.
248. (b) Bengaluru or Bangalore is identified as the hottest outsourcing destination
in the world. Bangalore continues to rule as India’s software hub, with its
availability of skilled resources. The pleasant climate of Bangalore has also
been a factor in Bangalore’s popularity.
249. (d) Dyestuff sector is one of the important segments of chemical industry.
Chemical industry is one of the oldest industries in India. The maximum
consumption of dyestuffs is in Textile industry.
250. (b) Construction falls in infrastructure sector Infra structure sector includes–
roads, railways, ports, airports, electricity, telecommunications, irrigation
and pipelines etc.
251. (d) Industrial clusters development has an objective to support the
sustainability and growth of small and medium enterprises in India. This
scheme is governed and administered by the Ministry of micro, small and
medium enterprises.
252. (c) Pollution trends show inverse relationship with economic development. In
early stage, pollution increases due to urbanization and industrialization.
At last, pollution declines due to structural changes towards service sector.
253. (c) Primary sector-Agriculture, forestry fishing, mining and quarrying
Secondary sector- Manufacturing and construction, Gas and water supply
Tertiary sector- trade, transport catering, hotels, community and personnel
services, communication etc.
254. (b)
255. (a) Cellulose fibres obtained from wood acts as primary raw material for paper
and pulp industry.
256. (d) Major problems faced by the small scale industries are: Finance, Raw
Material, Idle Capacity, Technology, Marketing, Infrastructure, Under
Utilization of Capacity and Project Planning. Strike and lockouts is not a
problem of SSIs.
257 (b) HAL, the government-owned corporation is primarily involved in the
operations of the aerospace industry. These include manufacturing and
assembly of aircraft, navigation and related communication equipment.
258. (c)
259. (c) GOI imposed Infrastructure Cess on the production of vehicles. It is levied
@ 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain
capacity (i.e. not exceeding 4 metres in length and engine capacity of up to
1500cc) and 4% on other higher engine capacity vehicles and SUVs
(Sports Utility Vehicle.
260. (d) Eight Core sectors in India include Coal, Crude Oil, Natural Gas, Refinery
Products, Fertilizers, Steel, Cement and Electricity. Chemical is not
included in this Sector.
261. (d) Construction Industry is not included in Manufacturing Sector.
Business/ Entities Types of Companies

1. In an economy, the sectors are classified into public and private on the
basis of
(a) employment condition
(b) nature of economic activities
(c) ownership of enterprises
(d) use of raw materials
2. Economic liberalisation in India started with
(a) substantial changes in industrial licensing policy
(b) the convertibility of Indian rupee
(c) doing away with procedural formalities for foreign direct investment
(d) significant reduction in tax rates
3. Which of the following areas has been excluded, by the Ministry of
Corporate Affairs, from the ambit of Corporate Social Responsibility
(CSR) activities?
(a) livelihood enhancement and rural development projects.
(b) contributions made ‘directly or indirectly’ to any political party.
(c) promoting preventive health care and sanitation.
(d) making safe drinking water available would be considered as CSR
activities.
4. Which of the following commissions / companies of Indian origin
signed a pact for obtaining oil-blocks in Libya?
(a) Reliance petroleum
(b) Oil India Ltd.
(c) ONGC
(d) BPCL
5. Which company, adopted the Taj Mahal through the ‘Clean India
Campaign’ of tourism ministry?
(a) Indian oil
(b) BPCL
(c) HPCL
(d) ONGC
6. Classification of an enterprise into public or private sector is based
on [CDS- 2014-I]
(a) number of employees in the enterprise
(b) ownership of assets of the enterprise
(c) employment conditions for workers in the enterprise
(d) nature of products manufactured by the enterprise
7. According to the Companies Act, 2013, ‘nominal capital’
implies [CDS- 2014-I]
(a) such part of capital, which has been called for payment
(b) the maximum amount of share capital of a company
(c) such part of capital, which has been received by a company from its
shareholders
(d) such capital as the company issues from time to time for subscription
8. Which one of the following is not a feature of the Nehru-Mahalanobis
model of development strategy?
[NDA/NA-SP-2016-I]
(a) Development of capital goods industries
(b) Major involvement of the State in the economy
(c) Industrial deregulation and disinvestment in the public sector
(d) Enhancing the scope and importance of the public sector
9. Consider the following statements— [UGC-2016]
I. Sick Company is defined as one whose accumulated losses in any
financial year are equal to or more than 50% of its average net
worth during previous four financial years.
II. The Government set-up Board of Industrial and Financial
Reconstruction in 1987, Which of the statement given above
is/are correct?
Select the answer from the codes given below—
Codes :
(a) Only I
(b) Only II
(c) Both I and II
(d) Neither I nor II
10. During the episode of sustained fall in crude oil prices during the year
2015, which among the following best describes the pricing strategy of
the OPEC countries?
[UGC-2016]
(a) Transfer pricing
(b) Predatory pricing
(c) Defensive pricing
(d) Profit maximising prices
11. A firm will be of optimum size when— [UGC-2016]
(a) Marginal cost is at a minimum
(b) Average cost is at a minimum
(c) Marginal cost is equal to marginal revenue
(d) The firm maximises its output
12. Which of the following is India’s first Credit Information Company
(CIC)? [BOM-PO 2016]
(a) CRISIL Limited
(b) CRIF High Mark CIC (P) Limited
(c) Experian CIC of India (P) Limited
(d) Trans Union CIBIL Limited
Business/Corporate Governance/ Terms

13. Consider the following statements in regard to Hedge funds:
(1) Hedge funds are open to all types of investors.
(2) Hedge funds are immune to risk of the market and always produce
positive returns.
(3) Investments in hedge funds are illiquid as they often require investors
keep their money in the fund for at least one year.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 3 only
14. Consider the following statements in regard to ‘Inflation Index bonds’?

(1) Investment in these bonds is more risky as these bonds increase the
inflation risk attached to the investment.
(2) It is better financial instrument compared to FD to hedge the risk rising
out of volatile economy.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
15. Which of the following can be associated with ‘Gini Coefficient’?
(1) National income inequality
(2) Lorenz curve
(3) Education system
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
16. Which of the following statement (s) is /are false?
1. Wage Boards are tripartite in nature, with representatives from workers,
employers and independent members.
2. Except for the wage Board for Journalists and Non - Jouralists, all the
other wage boards are statutory in nature
3. Second National Commission on labour has recommended against the
utility of wages boards.
below: [CDS-2016-I]
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
17. Which of the following statements about India’s unorganised sector are
true? [CDS- 2014-I]
1. Labour is more in number than that in the organised sector.
2. Job security and work regulation are better in unorganised sector.
3. They are usually not organised into trade unions.

4. Workers are usually employed for a limited number of days.
Select the correct answer using the code given below
(a) 1, 2 and 4
(b) 1, 3 and 4
(c) 3 and 4
(d) 1 and 3
18. As per the RBI guidelines, which one of the following is the minimum
tenure of Masala Bonds that an Indian Company can issue offshore?
[NDA/NA-SP-2016-II]
(a) Five years
(b) Four years
(c) Three years
(d) Two years
19. The financial instrument, through which Indian companies can raise
money from overseas market in Rupees, is known as
— [UK-PSC 2016]
(a) RBI Bonds
(b) Gold Bonds
(c) Masala Bonds
(d) Overseas Bonds
Foreign Trade Policies

20. The major aim of devaluation is to
(a) Encourage exports
(b) Encourage imports
(c) Encourage both exports and imports
(d) Discourage both exports and imports
21. The Team-9 initiative is a techno economic cooperation venture
between India and eight countries of
(a) West Africa
(b) East Africa
(c) North Africa
(d) Central Africa
22. Foreign currency which has a tendency of quick migration is called
(a) Hot currency
(b) Soft currency

(c) Gold currency
(d) Scarce currency
23. The value of gold is determined in
(a) London
(b) Dubai
(c) Rome
(d) Teheran
24. Consider the following actions which the government can take:
1. Devaluing the domestic currency.
2. Reduction in the export subsidy.
3. Adopting suitable policies which attract greater FDI and more funds
from FIIs.
Which of the above action/actions can help in reducing the current account
deficit?
(a) 1 and 2
(b) 2 and 3
(c) 3 only
(d) 1 and 3
25. Which one of the following statements with regard to India’s economy
between 1814 to 1860 is not
correct? [CDS-2015-II]
(a) Between 1814 and 1850, four commodities dominated India’s exports-
raw silk, opium, cotton and indigo.
(b) Between 1814 and 1860, five commodities dominated India’s exports-
raw silk, opium, cotton, indigo and jute.
(c) Indigo and raw silk required processing techniques.
(d) Indigo and raw silk were financed by foreign capital.
26. Which among the following will constitute Foreign Direct Investment
(FDI)? [UGC-2016]
(a) Buying a company in the target country
(b) Expanding operations of an existing business in that country
(c) Investing in the shares and stocks of companies in the capital market
(d) Both (a) and (b)
27. Which of the areas given below is/are mainly funded by the
International Development Agency in the developing
countries? [UGC-2016]
I. Infrastructure
II. Education
III. Environment friendly projects
IV. Health care
Select the correct answer using the codes given below—
Codes :
(a) I, II and IV
(b) I, II and III
(c) I, II and IV
(d) All of these
28. When two or more countries enter into an agreement to eliminate
import quota and tariffs and promote trade among themselves, such a
group of countries are said to form a
— [UGC-2016]
(a) Free Trade Area
(b) Custom Union
(c) A Common Market
(d) Both (b) and (c)
29. The entire capital of the ECGC is contributed by—
[BOM-PO 2016]
(a) Banks/FI/Corporates
(b) Government of India
(c) EXIM Bank
(d) Insurance Companies
30. Which of the following is a bond through which Indian entities can
raise money from foreign markets in rupees, and not in foreign
currency? [BOM-PO 2016]
(a) Corporate Bonds
(b) Masala Bonds
(c) Municipal Bonds
(d) Zero-coupon Bonds
31. Globalisation does not include— [UK-PSC 2016]
(a) Reduction in import duties
(b) Abolition of import licensing
(c) Free flow of Foreign Direct Investment
(d) Disinvestment of Public Sector equit
Foreign Exchange Services

32. Which of the following authority Sanctions foreign exchange for
import of goods? [UP-PCS 2011]
(a) Any National Bank
(b) Exchange Bank
(d) Ministry of Finance
33. Who maintains the foreign exchange reserve in India?
[UP-PCS 2012]
(b) State Bank of India
(c) Ministry of Finance Government of India
(d) Export - Import Bank of India
34. Which among the following is/are true for Real Effective Exchange
Rate of the currency of a country? [UGC-2016]
(a) It is weighted average of the value of rate traded currencies
(b) It is adjusted for inflation rate of prices
(c) It is not adjusted for inflation of prices
(d) Both (a) and (b) are true
35. In the context of the Indian economy, which of the following options
correctly describe the composition of the foreign exchange
resources? [UGC-2016]
(a) Foreign currency + loans from the World Bank + SDRs + Gold
holdings of R.B.I.
(b) Foreign Currency Assets + Gold holdings of R.B.I. + F.D.I.
(c) SDRs + Gold holdings of the R.B.I. + Foreign Currency Assets
(d) Remittances of NRIs + Exports earnings in a year + loans from the
IMF
Balance of Trade & Payment

36. In which of the following years, was the trade balance favourable to
India?
(a) 1970-71 and 1974-75
(b) 1972-73 and 1976-77

(c) 1972-73 and 1975-76
(d) 1971-72 and 1976-77
37. Why is there a need to always import cotton?
(a) Obsolete machinery
(b) Increasing demand
(c) Shortage in the home market
(d) Poor quality in the domestic market
1. India has attained self-sufficiency in almost all consumer goods.
2. In terms of capital goods, India still depends on the import.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
39. Which one of the following items has gained the highest growth rate in
the import composition of the Indian Economy in the last decade ?
(a) pearls, precious and semiprecious stones
(b) gold and silver
(c) oil-cake and other solid residues
(d) none of the above
40. Which of the following does not form part of current account of
Balance of Payments? [CDS-2014-II]
(a) Export and import of goods
(b) Export and import of services
(c) Income receipts and payments
(d) Capital receipts and payments
41. Balance of Payment includes [UP-PCS 2008]
(a) Visible Trade
(b) Invisible Trade
(c) Debts
(d) All the above
Special Economic Zones & FDI
42. The policy of Special Economic Zone (SEZ) in India was implemented
with effect from
(a) Nov. 1998
(b) Dec. 1999
(c) Nov. 2000
(d) Feb. 2002
43. India’s first port-based Special Economic Zone named International
Container Trans-shipment Terminal (ICTI) is being set-up at?
(a) Kandla
(b) Kochi
(c) Goa
(d) Tuticorin
44. The SEZ Act 2005 which came into effect in February 2006 has certain
objectives? In this context consider the following :
1. Development of infrastructure facilities
2. Promotion of investment from foreign sources.
3. Promotion of export of services only.
Which of the above is/are objective of this Act?
(a) 1 and 2
(b) 2 only
(c) 2 and 3
(d) 1, 2 and 3
45. In which one of the following places was the Asia’s first Export
Processing Zone (EPZ) set-up?
(a) Santa Cruz
(b) Kandla
(c) Cochin
(d) Surat
46. Which of the following sectors of the Indian Economy is prohibited
from Foreign Direct Investments (FDIs) ?
(a) Retail Trading
(b) Lottery Business
(c) Gambling and Betting
47. A great deal of Foreign Direct Investment (FDI) to India comes from
Mauritius comparing with many major and mature economies like UK
and France. Why?

(a) India has preference for certain countries as regards receiving FDI.
(b) India has double taxation avoidance agreement with Mauritius.
(c) Most citizens of Mauritius have ethnic identity with India and so they
feel secure to invest in India
(d) Impending dangers of global climatic change prompt Mauritius to make
huge investments in India.
48. Both Foreign Direct Investment (FDI) and Foreign Institutional
Investor (FII) are related to investment in a country. Which one of the
following statements best represents an important difference between
the two?
(a) FII helps bring better management skills and technology, while FDI
only brings in capital.
(b) FII helps in increasing capital availability in general, while FDI only
targets specific sectors.
(c) FDI flows only into the secondary market, while FII targets primary
market.
(d) FII is considered to be more stable than FDI.
49. Areas which are engines for economic growth supported by quality
infrastructure and complemented by an attractive fiscal package are
known as
[NDA/NA-SP-2016-I]
(a) Export Processing Zones
(b) Duty Free Tariff Zones
(c) Special Economic Zones
(d) Technology Parks
50. Which of the following is/are not FDI policy change(s) after 2010?
1. Permission of 100 percent FDI in automotive sector.
2. Permitting foreign airlines to make FDI up to 49 percent
3. Permission of up to 51 percent FDI under the government approval
route in multi-brand retailing, subject to specified conditions
4. Amendment of policy on FDI in single-brand product retail trading for
aligning with global practices
below: [NDA/NA-SP-2016-I]
(a) 1 only
(b) 2 and 4 only

(c) 1 and 2 only
(d) 1, 2 and 3 only
51. Special Economic Zone (SEZ) Act became effective in
[UP-PCS 2010]
(a) 2004
(b) 2005
(c) 2006
(d) 2007
1. (c) In an economy, the sectors are classified into private and public
on the basis of ownership.
Public Ownership - Majority or controlling share (51%) of a firm
by Government.
Private Ownership - Being owned by a private individual or
organization rather then by the state or public.
2. (a) Economic liberalisation in India started with substantial changes
in industrial licensing policy. The LPG Model (Liberalisation,
Privatisation & Globalisation) was introduced by Dr Manmohan
Singh in 1991 as India was facing problems of depleting reserves.
3. (b) According to new CSR rules, companies must spend at least 2%
of their 3 year average annual profit on social welfare activites.
However, funds given to political parties and money spent on own
employees and their families will not countas CSR.
4. (b) Oil sector majors, ONGC Videsh (OVL) and the Oil India-
IndianOil (OIL-IOC) combine have bagged an oil block each in
Libya. This will enhance exploration possibilities for the Indian
companies in northern Africa.
ONGC : An Indian multinational oil & Gas Company
headquarters in Dehradun
BPCL – An Indian state controlled oil and Gas Company
headquarters in Mumbai (Maharashtra)
Reliance Petroleum – Oil Industry Company, Head quarters–
Ahmedabad.
5. (d) With an aim to attract more visitors to the country by improving
cleanliness and hygiene at tourist destinations, Tourism Minitry
launched the “Clean India” campaign at world heritage site Taj
Mahal which has been adopted by ONGC. It is the second site to
be covered under this project. The first one was Qutub Minar.
6. (b) A company organized for commercial purposes is called an
enterprise. Classification of an enterprise into public or private
sector is based on ownership of assets of the enterprise.
7. (b) Nominal, authorized or registered capital means the sum
mentioned in the capital clause of Memorandum of Association. It
is the maximum amount which the company raises by issuing the

shares and on which the registration fee is paid. This limit cannot
be exceeded unless the Memorandum of Association is altered.
8. (c) Disinvestment was not part of the model.
9. (c) An industrial unit is also regarded as potentially sick or weak unit
if at the end of any financial year, it has accumulated losses equal
to or exceeding 50 per cent of its average net worth in the
immediately preceding four financial years and has failed to repay
debts to its creditor(s) in three consecutive quarters on demand
made in writing for such repayment.
The Board for Industrial and Financial Reconstruction was
established under The Sick Industrial Companies (Special
Provisions) Act, 1985. The board was set up in January 1987 and
became functional as of 15 May 1987.
10. (c) Defensive Pricing is a pricing strategy where a product or service
is set at a very low price with the intension to drive competitors
out of market.
11. (b)
12. (d) Trans Union CIBIL Ltd., founded in August 2000, in India’s first
Credit Information Company. CIBIL collects and maintains
records of an individual’s payments pertaining to loans and credit
cards.
13. (d) Hedge funds invest in a diverse range of markets and use a wide
variety of investment styles and financial instruments. Hedge
funds are open only to certain types of investors in a country
specified by the regulator and cannot be offered or sold to the
general public. Legally, hedge funds are most often set up as
private investment partnerships that are open to a limited number
of investors and require a very large initial minimum investment.
14. (b) Inflation-indexed bonds are bonds where the principal is indexed
to inflation. They are thus designed to cut out the inflation risk of
an investment. These bonds thus decrease the inflation risk
attached to the investment. Moreover these bonds are a better
hedge than FD in a volatile economy.
15. (c) The Gini coefficient is a measure of statistical dispersion intended
to represent the income distribution of a nation’s residents. Gini
coefficient commonly used as a measure of inequality of

individual income or wealth. Lorenz curve helps to find
mathematical value of Gini coefficient.
16. (b) Besides for the Wage Boards for journalists and non-journalists
newspaper and new-agency employees being Statutory Wage
Board, all other wage boards are non-statutory in application. That
is why recommendations made by these Boards are out of
enforceable by the law.
17. (b) Unorganized workers (UW) in India have increased many folds
post independence. Around 52% of UW’s are engaged in
agriculture & allied sector and they constitute more than 90% of
the labour work force.
Characteristics of unorganized sector are:
• Excessive seasonality of employment
• Poor working conditions
• No fixed jobs
• Work in very poor working environment
• No job regulation
• No security of Employment
• Employed for a limited period
18. (c) The minimum period of maturity for Masala bonds up to an INR
equivalent of USD 50 million in a financial year will be 3 years,
and for above USD 50 Million (INR equivalent) will be 5 years.
19. (c) Masala bonds are bonds issued outside India but denominated in
Indian Rupees, rather than the local currency. The first Masala
bond was issued by the World Bank backed International Finance
Corporation in November 2014 when it raised 1,000 crore bond to
fund infrastructure projects in India.
20. (a) The major aim of devaluation is to encourage exports.
Devaluation is a deliberate downward adjustment to the value of a
currencies. One reason a country may devaluate its currency is to
combat trade imbalances.
21. (a) In a bid to expand its economic reach, India launched an initiative
in 2004 called Techno-Economic Approach for Africa–India
Movement (TEAM–9), together with eight energy and resource-
rich West African countries viz. Burkina Faso, Chad, Cote

D’Ivoire, Equatorial Guinea, Ghana, Guinea Bissau, Mali, and
Senegal. The initiative was part of a broader policy to engage the
underdeveloped, yet resource-wealthy countries of West Africa,
which required both low-cost technology and investment to
develop their infrastructure. In particular, India increasingly wants
to play an important role in helping Ivory Coast and other West
African countries channel their energy resources more efficiently.
22. (a) Foreign currency which has a tendency of quick migration is
called hot currency.
Soft Currency : A currency with a value that fluctuates as a result of
country’s political or economic uncertainty.
Digital Gold Currency : It is a form of electronic money based
on mass unit of Gold.
Scarce Currency : A currency that is traded in a foreign
exchange market and for which demand is persistently high
relative to its supply.
23. (a)
24. (d) In the traditional accounting of balance of payments, the current
account equals the change in net foreign assets. A current account
deficit implies a paralleled reduction of the net foreign assets.
25. (b) During the period of 1814 - 1860 AD. mainly five commodities
are exported from British India such as - cotton, indigo, jute
opium and raw silk.
26. (d) Foreign direct investments can be made through the opening of
a subsidiary or associate company in a foreign country, acquiring
a controlling interest in an existing foreign company, or by means
of a merger or joint venture with a foreign company.
27. (a) The areas such as Infrastructure, Education and Health care are
mainly funded by International Development Agency in the poor
and developing countries.
28. (a) Free trade, usually defined as the absence of tariffs, quotas, or
other governmental impediments to international trade, allows
each country to specialize in the goods it can produce cheaply and
efficiently relative to other countries.
29. (b) ECGC Ltd. (Export Credit Guarantee Corporation of India Ltd.),
wholly owned by Government of India, was set up in 1957 with
the objective of promoting exports from the country by providing
Credit Risk Insurance and related services for exports.
30. (b) A Rupee Denominated Bond or Masala Bonds are the bonds
issued by an Indian entity in foreign markets and the interest
payments and principal reimbursements are denominated
(expressed) in rupees.
31. (d) The main Ingredients of Globalization of Indian Economy are
Privatization of the public sector, Disbanding of Controls and
Regulations and Deregulation of Trade and Finance.
Disinvestment of Public Sector equity doesn’t include in
Globalization.
32. (c) Reserve Bank of India is the Sanctioning Authority for foreign
exchange for the import of goods.
33. (a) Manager of Foreign Exchange is one of the Function of RBI with
the objective to facilitate external trade and payment and promote
orderly development and maintenance of foreign exchange market
in India.
34. (d) The Real Effective Exchange Rate is the weighted average of a
country’s currency relative to an index or basket of other major
currencies, adjusted for the effects of inflation.
35. (c) Foreign exchange resources normally include, gold reserves,
special drawing rights (SDRs), and International Monetary Fund
(IMF) reserve positions.
36. (b) A favorable balance of trade is known as a trade surplus and
consist of exporting more than is imported. It is favorable in
1972-1973 & 1976-1977.
37. (a) India is amongst the top cotton manufactures in terms of quality.
One main reason to import cotton is obsolete machinery.
38. (b) In terms of capital goods, India still depends on the import has not
attained self sufficiency in almost all consumer goods.
39. (b) The items gold and silver have gained the highest growth rate in
the import composition of the Indian economy in the last decade.
40. (d) Capital receipts and payments do not form part of current account
of Balance of Payment.
41. (d) The balance of payments (BOP) is the method countries use to
monitor all international monetary transactions at a specific
period. BOP includes all external visible and non-visible
transactions, deficit or a surplus of a country.
42. (c) In Nov. 2000, the policy of Special Economic Zone (SEZ) in India
was implemented with a view to overcome the shortcomings
experienced on account of the multiplicity of controls and
clearances; absence of world-class infrastructure, and with a view
to attract larger foreign investment in India.
43. (b) The Kochi International Container Transhipment Terminal
(ICTT), locally known as the Vallarpadam Terminal, is a container
trans-shipment facility which is part of the Cochin Port in Kochi,
India.
44. (a) The main objectives of the SEZ Act (2005) are:
a. promotion of the export of goods and services
b. generation of additional economic activity
c. promotion of investment from foreign and domestic sources
d. development of infrastructure facilities
e. creation of employment opportunities
45. (b) India was one of the first countries in Asia to recognize the
effectiveness of the Export Processing Zone (EPZ) model in
promoting exports, with Asia’s first EPZ set up in Kandla in 1965.
This was done to overcome the shortcomings of the multiplicity
of controls and clearances; absence of world-class infrastructure,
and an unstable fiscal regime and with a view to attract larger
foreign investments in India.
46. (d) Retail trading, lottery business and gambling and betting are the
sectors of the Indian economy are prohibited from Foreign Direct
Investment (FDIs).
47. (b) The double taxation avoidance agreement between India and
Mauritius has boosted investment in India to a great extent in the
last decade making Mauritius one of the key economic partners of
India.
48. (b) FDI is an investment that a parent company makes in a foreign
country. On the contrary, FII is an investment made by an investor
in the markets of a foreign nation.
49. (c)
50. (a)
51. (c) The Special Economic Zones Act, 2005, was passed by
Parliament in May, 2005 which received Presidential assent on the
23rd of June, 2005 and it came into effect on 10th February, 2006.
1. Which one among the following countries has the lowest GDP per capita?
(a) China
(b) India
(c) Indonesia
(d) Sri Lanka
2. Sustainable development is a case of inter-generational sensibility in respect
of use of
(a) natural resources
(b) material resources
(c) industrial resources
(d) social resources
3. The concept of sustainable development relates to
(a) Consumption levels
(b) Exhaustible resources
(c) Intergenerational equity
(d) Social Equity
1. Central warehousing corporation is responsible for the construction and
running of the godowns for storage of agriculture products.
2. Central warehousing corporation of India was established in 1957.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
5. ‘World Investment Report’ is the annual report published by the
International institution
(a) World Bank
(b) IMF
(c) WTO
(d) UNCTAD
6. Which of the following is not a part of World Bank?

(a) IMF
(b) IBRD
(c) MIGA
(d) IDA
7. Where is the headquarter of World Bank located?
(a) Geneva
(b) Rome
(c) New York
(d) Washington D.C.
8. In which city the meeting of World Economic Forum (WEF) – 2017 was
held?
(a) Davos-Klosters
(b) Nepal
(c) England
(d) Kochi America
9. What is CRISIL ?
(a) Bank
(b) Insurance Company
(c) Depository
(d) Credit Rating Agency
10. Where is the Headquarters of WTO located?
(a) Rome
(b) Geneva
(c) Washington
(d) New York
11. Which country became a member of European Union on 1st July 2013?
(a) Bulgaria
(b) Romania
(c) Croatia
(d) Serbia
12. POSCO, the steel company is associated with the country?
(a) South Korea
(b) Japan
(c) France
(d) Germany
13. Which country started privatisation of state-owned enterprises as a major
state policy?
(a) UK under Margaret Thatcher

(b) Russia in CIS
(c) Mexico, Argentina and Brazil
(d) Italy, France and Malaysia
14. The International Development Association, a lending agency is
administered by the
(a) IBRD
(b) IFAD
(c) UNDP
(d) UNIDO
15. WTO came into existence at the conclusion of which round of GATT ?
(a) Singapore
(b) Uruguay
(c) Tokyo
(d) Marrakesh
16. World Investment Report is published by which of the following ?
(a) WEF
(b) WTO
(c) GATT
(d) UNCTAD
17. Which of the following group of countries has formed the NAMA-11 of
World Trade Organization ?
(a) Developed countries
(b) Least developing countries
(c) Developing countries
18. Which of the following agencies is not the rating agency of an economy ?
(a) Fitch Group
(b) CRISIL
(c) Moody’s Investor Service
(d) Samuel’s Investor Group
19. Which one of the following organisations is related with Doha Development
Agenda ?
(a) IMF
(b) WTO
(c) World Bank
(d) UNO
20. Which of the following credit rating agencies is the ‘Big Three Credit rating
agencies’ of the world ?
(a) Fitch Group
(b) Moody’s Corporation
(c) Standard and Poor’s
21. Which one of the following International institutions has offered the
concessional loans and grants to the world’s poorest developing countries ?
(a) IFC
(b) IDA
(c) IMF
(d) WB
22. Which one of the following major markets has the highest share of
composition of exports of ores and minerals in the world ?
(a) United States
(b) India
(c) Brazil
(d) China
23. The capital of IMF is generated by contribution of the
(a) Credit
(b) Deficit financing
(c) Member nations
(d) Borrowings
24. Which one of the following countries is the first borrower of fund from the
International Monetary Fund ?
(a) United States
(b) France
(c) Spain
(d) India
25. Which one of the following institutions is related with the Green / Blue Box
subsidies ?
(a) United Nations
(b) World Bank
(c) World Tourism Organization
(d) World Trade Organization
26. Which one of the following is the final session of the General Agreement on
Tariff- and Trade (GATT) ?
(a) Singapore session
(b) Geneva session

(c) Washington session
(d) Uruguay session
27. Which one of the following countries has the highest share in the world
export among the Asian countries ?
(a) South Korea
(b) Singapore
(c) India
(d) China
28. Which one of the following countries is the top user of the anti-dumping
measures in the world in the decade ?
(a) India
(b) United States
(c) Japan
(d) China
29. Which one of the following countries of the world has signed the first
Comprehensive Economic Partnership Agreement with India ?
(a) Sri Lanka
(b) Malaysia
(c) Mauritius
(d) Singapore
30. ‘Global Competitiveness Report’ is released by which of the following
organisations ?
(a) WTO
(b) EU
(c) World Bank
(d) WEF
31. TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement is
administered by
(a) UNCTD
(b) UNO
(c) WTO
(d) World Bank
32. Which one of the following institutions publishes the report of ‘World
Economic Outlook’ ?
(a) IMF
(b) World Bank
(c) RBI
(d) UNCTAD
33. What does S & P 500 relate to ?
(a) Super computer
(b) A new technique in e-business
(c) A new technique in bridge building
(d) An index of stocks of large companies
34. Which one of the following is the proposed currency of the Gulf
Cooperation Council (GCC) ?
(a) Khaleeji
(b) Sucre
(c) Dinar
(d) None of these
35. Which one of the following is the correct sequence of the countries having
Foreign Exchange Reserve from high to low?
(a) China – Russia – India – France
(b) China – France – India – Russia
(c) France – China – Russia – India
(d) France – China – India – Russia
(a) Kospi Index: South Korea
(b) TSEC Weighted Index: Thailand
(c) SET Index: China
37. Which one of the following is the recognised lender of the External
Commercial Borrowings in the international Capital Market ?
(a) Export Credit Agencies
(b) Asian Development Bank
(c) IFC
38. Special Drawing Rights (SDRs) is available at
(a) IBRD
(b) IMF
(c) IDA
(d) OECD
39. Which sister organisation of the World Bank helps private activity in
developing countries by financing projects with long-term capital in the
form of equity and loans?
(a) Asian Development Bank
(b) IMF
(c) International Finance Corporation
(d) International Development Association
40. As regards the use of international food safety standards as reference point
for the dispute settlements, which one of the following does WTO
collaborate with?
(a) International Organization for Standardization.
(b) International Federation of Standards Users.
(c) Codex Alimentarius Commission.
(d) World Standards Cooperation.
41. Which of the following is an example of “Portfolio Investment”?
(a) An American places funds in a savings account in Canada
(b) Tokyo Bank of Japan buys Union Bank of the United States
(c) Saturn Corp. (owned by General Motors) builds a new factory in Tennessee
(d) An American puts $10,000 into a money market fund
42. In which one of these countries do more than 80% say national economic
conditions are good?
(a) Argentina
(b) China
(c) Kenya
(d) Philippines
43. According to the monetarists, in the long-run, the Phillips Curve is:
(a) vertical
(b) horizontal
(c) downward sloping
(d) upward sloping
44. What is happening with the import of Chinese toys in India?
(a) Indian toys are selling more
(b) Indian consumers are buying less
(c) Indian consumers are getting more choice at cheaper rates
(d) Chinese consumers are falling short of choice
45. Special drawing rights are not
(a) a credit line allocated by the IMF to member countries according to each
country’s quota
(b) backed by US dollars.
(c) the IMF’s unit of account.
(d) a basket of five currencies.
46. MILA is a stock exchange not involving which of the following countries’
stock exchanges?
(a) Chile
(b) Peru
(c) Colombia
(d) Cuba
47. In which of the following countries was a National Exchange Control
Administration (CADIVI) set up to approve all legal purchases of foreign
currency?
(a) Brazil
(b) Spain
(c) Venezuela
(d) Mexico
48. Multilateral Investment Guarantee Agency (MIGA) is a part of the—
(a) United Nations
(b) World Economic Forum
(c) World Trade Organisation
(d) World Bank
49. The functions of the International Monetary Fund include all of the
following except…
(a) to provide emergency loans to countries facing balance of payments
problems.
(b) to monitor macroeconomic developments continuously in member countries.
(c) to serve as the world central bank.
(d) to provide a line of credit for each member country.
50. What percentage of currency devaluation was allowed by the IMF in the
Bretton Woods Agreement?
(a) 10 %
(b) 7%
(c) 20 %
(d) 15 %
51. In which year was the new currency Euro introduced?
(a) 1983
(b) 2001
(c) 1999
(d) 1995
52. Which of the following constitutes the world bank?
1. International Bank for Reconstruction and Development.
2. International Finance Corporation

3. International Development Association
4. International Monetary Fund
(a) 1, 2 and 3
(b) 1 and 2
(c) 3 and 4
(d) 1, 2, 3 and 4
53. Which of the following were the aims behind the setting up of the World
Trade Organization (WTO)?
1. Promotion of free trade and resource flow across countries
2. Protection of intellectual property rights
3. Managing balanced trade between different countries
4. Promotion of trade between the former East Block countries and the western
world.
(a) 1, 2, 3 and 4
(b) 1 and 2
(c) 2 and 3
(d) 1 and 4
below the lists :
List I List II
A. WTO 1. Provides loans to address short term
balance of payments.
B. IDA 2. Multi-lateral trade negotiation body
C. IMF 3. Sanction of soft loans
D. IBRD 4. Facilitating lending and borrowing
for reconstruction and development
A B C D
(a) 2 3 4 1
(b) 2 3 1 4
(c) 3 2 4 1
(d) 3 2 1 4
55. A country is said to be in a debt trap if :
(a) it has to abide by the conditionalities imposed by the International Monetary
Fund.
(b) it has to borrow to make interest payments on outstanding loans.
(c) it has been refused loans or aid by creditors abroad.

(d) the World Bank charges a very high rate of interest on outstanding as well as
new loans.
56. Basel II relates to which one of the following?
(a) International standards for safety in civil aviation.
(b) Measures against cyber crimes.
(c) Measures against drug abuse by sports persons.
(d) International standards for measuring the adequacy of a bank’s capital.
57. NAMA-11, group of countries frequently appears in the news in the context
of the affairs of which one of the following?
(a) Nuclear Suppliers Group
(b) World Bank
(c) World Economic Forum
(d) W.T.O.
58. In the context of the affairs of which of the following is the phrase “Special
Safeguard Mechanisms” mentioned in the news frequently?
(a) United Nations Environment Programme
(b) World Trade Organisation
(c) ASEAN - India Free Trade Agreement
(d) G-20 Summits
59. In order to comply with TRIPS agreement, India exacted the Geographical
Indications of goods (Registration and protection Act 1999.) The
difference/differences between a “Trade Mark” and a ‘Geographical
Indicate’ is/are :
1. A trade mark is an individual or a company’s right whereas a Geographical
Indication is a community’s right.
2. A Trade Mark can be licensed whereas a Geographical Indication can’t be
licensed.
3. A Trade mark is assigned to the manufactured goods whereas the
Geographical Indication is assigned to the agricultural goods/ products
and handicrafts only.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3.
60. Consider the following countries :
1. Brazil
2. Mexico
3. South Africa
According to UNCTAD, Which of the above is/are categorized as “Emerging
Economies”
(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3.
61. Stiglitz commission established by the President of the United Nations
General Assembly was in the international news. The commission was
supposed to deal with:
(a) The challenges posed by the impending global climate change and prepare a
road map.
(b) The working of the global financial systems and to explore ways and means
to secure a more sustainable global order.
(c) Global terrorism and prepare a global action plan for the mitigation of
terrorism.
(d) Expansion of the United Nations Security Council in the present global
scenario.
62. In the context of bilateral trade negotiations between India and European
Union, what is the difference between European commission and European
Council?
1. European Commission represents the EU in trade negotiations whereas
European Council participates in the legislation of matter pertaining to
economic policies of the European union.
2. European commission comprises the heads of state or government of
member countries whereas the European council comprises the persons
nominated by European parliament.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
63. Karl Marx explained the process of class struggle with the help of which
one of the following theories?
(a) Empirical Liberalism
(b) Existentialism
(c) Darwin’s Theory of Evolution
(d) Dialectical Materialism

64. With reference to ‘look east’ policy of India, consider the following
statements :
1. India wants to establish itself as an important regional player in the East
Asian Affairs.
2. India wants to plug the vacuum created by the termination of cold war.
3. India wants to restore the historical and cultural ties with its neighbours in
South-East and East-Asia.
(a) 1 only
(b) 1 and 3 only
(c) 3 only
(d) 1, 2 and 3.
65. Regarding the International Monetary Fund, which one of the following
statements is correct?
(a) It can grant loans to any country.
(b) It can grant loans to only developed countries.
(c) It can grant loans to only member countries.
(d) It can grant loans to the central bank of a country.
66. IMF was established to meet which of the following objectives?
1. Promoting international monetary co-operation.
2. Expanding international trade.
3. Lessening the disequilibrium in balance of trade.
4. Avoiding competitive exchange depreciations.
Codes :
(a) 1, 2 and 3
(b) 1, 3 and 4
(c) 2 and 4
(d) 1, 2, 3 and 4
67. World Bank helps countries with loans for the purpose of :
(a) Reconstruction and development
(b) Stimulating private investment
(c) Tackling foreign exchange crises
(d) Meeting deficits in government budget.
68. ‘The Doing Business Report’ is prepared by which of the following
organisations every year ?
(a) World Bank
(b) International Monetary Fund (IMF)
(c) Asian Development Bank (ADB)

(d) World Trade organisation (WTO)
69. The term ‘Paper Gold’ means:
(a) Special Drawing Rights of the IMF.
(b) Special accommodation facility of the world bank.
(c) Currencies still on Gold standard.
(d) Deficit financing.
70. Consider the following organisations:
1. IBRD
2. IFC
3. IFAD
4. IMF
Which of these are agencies of the United Nations?
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 1, 2, 3 and 4
71. ‘World Development Report’ is annual publication of :
(a) International Bank of Reconstruction and Development (IBRD)/World Bank.
(b) United Nations Development Programme (UNDP)
(c) World Trade Organisation (WTO)
(d) International Monetary Fund (IMF)
72. Which among the following statements is/are true with regard to WTO
membership?
1. All WTO members automatically receive the most favourable nation status.
2. Over 75% of WTO members are from developing countries, and the
membership allows them access to develop markets at lower tariff.
(a) only 1
(b) only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
73. Consider the following objectives of the Bretton Woods system
1. To maintain the exchange rate by trying its currency to the US dollar.
2. To bridge temporary imbalances of payments.
Which of the objectives given above is/are correct?
(a) only 1
(b) only 2
(c) Both 1 and 2

(d) Neither 1 nor 2
74. Consider the following
1. Manufacturing products
2. Fuel products
3. Fish and fish products
4. Forestry products
5. Mining products
Which of the items given above is/are included in the NAMA?
(a) 1 and 5
(b) 1, 2, 3 and 5
(c) 1, 2 and 5
(d) All of these
below the lists
List I List II
(WTO session) (Centre)
A. First 1. Doha, Qatar
B. Second 2. Singapore
C. Third 3. Geneva, Switzerland
D. Fourth 4. Seattle, US
Codes :
A B C D
(a) 2 4 3 1
(b) 2 3 4 1
(c) 4 3 1 2
(d) 4 1 3 2
76. Consider the following statements.
1. Multilateral Investment Guarantee Agency became operational in 1945.
2. Multilateral Investment Guarantee Agency is the insurance wing of the
World Bank group.
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
77. Consider the following pillars
1. Domestic Support
2. Market access
3. Export Subsidies
Which of the following pillars given above is/are included in Agreement on
Agriculture of the WTO?
(a) Only 2
(b) 1 and 3
(c) 2 and 3
(d) All of these
78. The unbalanced growth model was propounded first by
1. Albert O. Hirschman
2. H. S. Singer and Raul Prebisch
3. Kindelberger and Ragnar Nurkse
4. W. W. Rostow and Paul Streeten
Codes:
(a) 1 and 2
(b) 1 and 3
(c) 1 and 4
(d) 1only
79. Harrod-Domar model of growth is based on the concepts of and their
equality.
1. Population and productivity growth.
2. Investment and average growth rate of income.
3. Actual, warranted and natural growth rate.
4. Productivity growth and investment growth.
Codes:
(a) 1 and 3
(b) 1 and 4
(c) 3 only
(d) 1, 2 and 3
80. Factor endowment theory is also known as
1. Modern theory of international trade.
2. Classical theory of international trade.
3. Reciprocal demand theory.
4. Factor proportions theory of international trade.
Codes:
(a) 1 and 2
(b) 2 and 3
(c) 1 and 4
(d) 3 and 4
81. Most important theory of increasing public expenditure is associated with
1. Adolph Wagner’s hypothesis
2. Critical limit hypothesis
3. Administrative efficiency hypothesis
4. Stability of income hypothesis
Codes:
(a) 1 and 2
(b) 1 and 3
(c) 1 only
(d) 3 and 4
Directions : Read the following questions and select the right combination of
Assertion (a) and Reason (R) from the codes given below.
82. Assertion (a): There is a natural tendency to collude under oligopoly.
Reason (R): Inter-dependence of firms in oligopolistic markets.
Codes:
83. Assertion (a) : In short run, the marginal cost of output is the cost of
additional labour and materials used in production.
Reason (R): Materials and labour used in production alone vary in short run.
Codes:
(a) (a) is correct, but (R) is incorrect.
(b) (a) is incorrect, but (R) is correct.
(c) Both (a) and (R) are correct, but (R) is the correct explanation of (a).
(d) Both (a) and (R) are incorrect.
84. Assertion (a): Post reform liberal trade policies have stimulated India’s
growth.
Reason (R): Private enterprise got opportunities to contribute to growth of Indian
manufacturing industries.
Codes:
(c) Both (a) and (R) are incorrect.
85. Assertion (a): Use of goods and services from which one can be excluded
are pure private goods.
Reason (R): Such goods and services are not provided free by the State.
Codes:
86. Assertion (a): ‘A country is poor because it is poor’.
Reason (R): Income of a poor country is low, so its savings and investment are
low. Low investment limits its productive capacity which leads to low
output and income.
Codes:
(a) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(b) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
87. Assertion (a): All historical events are the result of a continuous economic
struggle between different classes and groups in a society.
Reason (R): This struggle is because of the conflict between the mode of
production and the value attached to the roles of different agents of
production.
Codes:
(a) Both (a) and (R) are correct, but (R) is not the correct explanation of (a).
(b) Both (a) and (R) are correct, and (R) is the correct explanation of (a).
Directions : Read the questions and select the correct sequence from the codes
given below.
88. Identify the order of chronological development of the theory of demand.
1. Marshall’s theory of demand
2. Indifference curves
3. Revealed preference theory
4. Weak Preference ordering theory of demand.
Codes:
(a) 1, 3, 4, 2
(b) 4, 2, 1, 3
(c) 1, 3, 2, 4
(d) 1, 2, 3, 4
89. Identify the correct chronological order of the following theories.
1. Cambridge version of quantity theory of money.
2. Fisher’s version of quantity theory of money.
3. Tobin’s theory of demand for money.
4. Baumol’s theory of demand for inventory.
Codes:
(a) 3, 4, 1, 2
(b) 2, 1, 4, 3
(c) 4, 1, 2, 3
(d) 1, 2, 3, 4
90. Identify the correct chronological order of the following.
1. Keynes’ consumption function
2. Life Cycle hypothesis
3. Relative income hypothesis
4. Friedman’s permanent income hypothesis
Codes:
(a) 4, 2, 1, 3
(b) 2, 1, 3, 4
(c) 1, 3, 4, 2
(d) 3, 4, 2, 1
91. Identify the correct chronology of stages of Marxian model of economic
development -
1. Capitalist crisis
2. Capital accumulation
3. Surplus value
4. Materialistic interpretation of history
Codes:
(a) 2, 1, 3, 4
(b) 3, 4, 2, 1
(c) 4, 3, 2, 1
(d) 3, 2, 1, 4
92. The sequencing process of Harrod’s model of development is.
1. Natural growth rate
2. Warranted growth rate
3. Actual growth rate
4. Divergence
Codes:
(a) 4, 3, 2, 1
(b) 3, 2, 1, 4
(c) 2, 1, 4, 3
(d) 1, 4, 3, 2
93. Arrange the structure of balance of payments accounts in which these items
appear.
1. Capital account
2. Errors and omissions
3. Current account
4. Official settlements account
Codes:
(a) 1, 2, 3, 4
(b) 3, 1, 4, 2
(c) 4, 3, 2, 1
(d) 3, 4, 1, 2
94. Determine the order in which the following were developed.
1. Fisher’s F test of significance of difference between the means of more than
two samples.
2. Gosset’s t-test of difference between the means of two samples.
3. Pearson’s correlation coefficient.
4. Spearman’s rank correlation coefficient.
Codes:
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 3, 2, 1, 4
(d) 4, 1, 2, 3
Directions (Qs. 95-102) : Read the following questions and match the correct
pair from List-I and List-II. Use the codes given below for answering-
95.
List - I List - II
A. Kinked demand 1. William Baumol curve hypothesis
B. Sales maximization 2. Paul Sweezy model of oligopoly
C. Social Welfare Function 3. Adam Smith
D. Law of Invisible hand 4. Bergson
Codes:
A B C D
(a) 4 3 1 2
(b) 2 1 4 3
(c) 2 3 1 4
(d) 1 4 3 2
96.
List - I List - II
A. Psychological 1. Irving Fisher Law of
Consumption
B. Time preference 2. J. M. Keynes theory of
interest
C. Public Choice View 3. Mundell and Fleming
D. Open Economy 4. Gordon Tullock IS-LM mo
Codes:
A B C D
(a) 3 2 4 1
(b) 4 1 3 2
(c) 2 1 4 3
(d) 1 3 4 2
97.
List - I List - II
A. J. M. Buchanan 1. Canons of Public Expenditure
B. Findlay Shirras 2. Functional Finance
C. R. N. Bhargava 3. Public-Choice Theory
D. A. P. Lerner 4. Federal Finance
Codes:
A B C D
(a) 3 2 1 4
(b) 3 1 4 2
(c) 2 3 1 4
(d) 1 4 3 2
98.
List - I List - II
A. Organic Composition 1. Albert O. Hirschman
of Capital
B. Doctrine of Natural, Law 2. Schumpeter
C. Innovation 3. Karl Marx
D. Doctrine of Unbalanced 4. Adam Smith Growth
Codes:
A B C D
(a) 3 4 2 1
(b) 4 3 1 2
(c) 2 1 3 4
(d) 1 2 4 3
99.
List - I List - II
A. Low Income 1. Karl Marx
Equilibrium Trap
B. Poverty Measurement 2. Adam Smith
C. Laissez faire 3. Richard R. Nelson
D. Industrial Reserve Army 4. Suresh Tendulkar
Codes:
A B C D
(a) 1 2 4 3
(b) 3 4 2 1
(c) 4 3 1 2
(d) 2 1 3 4
100.
List - I List - II
A. Law of Absolute 1. Haberler Cost Advantage
B. Doctrine of 2. Heckscher-Ohlin Comparative
Cost Advantage
C. Modern Theory of 3. Adam Smith International
Trade
D. Opportunity Cost 4. Ricardo Principle
Codes:
A B C D
(a) 4 2 1 3
(b) 3 4 2 1
(c) 2 3 4 1
(d) 1 4 3 2
101.
List - I List - II
A. Monetarism 1. R. F. Kahn
B. Employment 2. T. Haavelmo multiplier
C. Multiplier effect 3. John Muth of balanced budget
D. Rational 4. Milton Friedman expectation
hypothesis
Codes:
A B C D
(a) 2 4 3 1
(b) 4 1 2 3
(c) 1 3 4 2
(d) 3 2 1 4
102.
List - I List - II
A. Theory of Probability 1. Single value to represent
distribution
B. Mean events 2. Uncertain
C. Normal Distribution 3. Mini replica of population
D. Sample with almost total area 4. Symmetrical

within M
(mean) + – 30 (sig, ma)
Codes:
A B C D
(a) 1 2 3 4
(b) 4 3 2 1
(c) 2 1 4 3
(d) 4 1 2 3
103. “Functional Finance” is associated with–
(a) Abba ‘P’ Lerner
(b) Adolph Wogner
(c) Adam Smith
(d) Adams
104. Green Box subsidies under WTO are allowed because they are considered to
be
(a) Minimally trade distorting.
(b) Higher among developed and relatively lower for developing countries.
(c) They are confined to agriculture sector.
(d) They are related to GATS provision.
105. Critical minimum effort theory is given by
(a) Leibenstein
(b) Rosenstein Rodan
(c) Arther Lewis
(d) Marx
106. Arrange the following in order in which they appeared. Use the code given
below:
(i) Friedman’s Quantity Theory of Money
(ii) Fisher’s Equation of Exchange
(iii) Cambridge Equation of Exchange
(iv) Don Patinkins Theory of Money
Codes:
(a) (ii) (iii) (iv) (i)
(b) (i) (ii) (iii) (iv)
(c) (ii) (iii) (i) (iv)
(d) (iii) (iv) (ii) (i)
107. Bretton Woods twins are
(a) USA and UK

(b) IMF and World Bank
(c) ITO and WTO
(d) GATT and UNESC
108. Forward and backward linkages were propounded by
(a) Gunnar Myrdal
(b) Hirschman
(c) Boeke
(d) Leibenstein
109. Which of the following is an ideal Index Number?
(a) Lespeyre
(b) Bowley
(c) Fisher
(d) Marshall-Edgeworth
110. According to Milton Friedman, Quantity Theory of Money deals with
(a) Prices
(b) Income
(c) Supply of Money
(d) Demand for Money
111. European Union decided to enforce European Stability Mechanism (ESM).
ESM is a system to achieve / safeguard–
(a) financial stability
(b) political stability
(c) free access to oil reserves in UAE and Kuwait
(d) free access to uranium reserves in Libya
(e) interests of all the members in case of attack by Iran or any other country
112. Match the following
List I List II
(Phase of Industrial (Features)
Revolution)
A. First Phase 1. Rise of steel, chemical,
electricity industries
B. Third Phase 2. Rise of cotton mill
C. Second Phase 3. Rise of steam engine
D. Fourth Phase 4. Rise of petrochemicals,
jet aircraft, computers
[CDS-2011-II]
Codes :
A B C D
(a) 2 3 1 4
(b) 2 1 3 4
(c) 4 1 3 2
(d) 4 3 1 2
[CDS-2011-II]
1. The global economy relied on oil for much of the 20th century as a portable
and indispensable fuel.
2. The immense wealth associated with oil generates political struggles to
control it.
3. History of petroleum is also the history of war and struggle.
4. Nowhere is this more obviously the case of war and struggle than in West
Asia and Central America.
(a) 1, 2, 3 and 4
(b) 2 and 4
(c) 1 and 3
(d) 1, 2 and 3
114. Which of the following factors was not a reason behind the occurrence of
the Industrial Revolution in England
first? [CDS-2013-II]
(a) No part of the country was far from the sea
(b) Navigable rivers made inland transport easier.
(c) In England machines could be operated by wind or water power due to
favourable climate condition
(d) England had coal, iron and other necessary mineral resources
115. Consider the following statements relating to the World
Bank: [CDS-2014-II]
1. The World Bank was established in 1946, which is headquartered in New
York.
2. The World Bank Group has set for itself the goal to end extreme poverty
from the World by 2030.
3. The World Bank is a vital source of financial and technical assistance to
developing countries around the world. It is not a bank in the ordinary
sense but a unique partnership to reduce poverty and support

development.
4. The World Bank Group comprises five institutions managed by their member
countries in order to promote shared prosperity by fostering the income
growth of the bottom 40% for every country.
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 1, 3 and 4
(d) 2 and 4 only
116. Which of the following statements about International Monetary Fund
(IMF) are correct ? [CDS-2014-II]
1. The IMF is a United Nations specialized agency.
2. The IMF was founded at the Bretton Woods Conference in 1944 to secure
international monetary cooperation.
3. The objective of the IMF is to stabilize currency exchange rates, and to
expand international liquidity (access to hard currencies).
Select the correct answer using the code given below :
(a) 1, 2 and 3
(b) 2 and 3 only
(c) 1 and 2 only
(d) 1 and 3 only
117. Consider the following statements relating to the World Trade Organization
(WTO): [CDS-2014-II]
1. The WTO deals with the global rules of trade between nations.
2. The goal of the WTO is to help producers of goods and services, exporters,
and importers conduct their business.
3. The WTO, which is a successor body of the General Agreement on Tariffs
and Trade, came into being following the Uruguay Round of
Negotiations.
4. The WTO distances itself in framing of rules on trad in intellectual property
rights.
(a) l, 2 and 3
(b) 2, 3 and 4
(c) 1, 2 and 4
(d) 1 and 3 only
118. Which of the following theories form the basis of international

trade? [CDS-2014-II]
1. Absolute cost difference
2. Comparative cost difference
3. Opportunity cost
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(c) 1,2 and 3
119. Which of the following was/were the feature(s) of Lenin’s New Economic
policy (NEP) for the Soviet Union?
1. Private retail trading was strictly forebidden
2. Private enterprise was strictly forbidden
3. Peasants were not allowed to sell their surplus
4. To secure liquid capital, concessions were allowed to foreign capitalists, but
the state retained the option of purchasing the products of such
concerns
[NDA/NA-SP-2016-II]
(a) 1 only
(b) 2 and 3
(c) 1, 2 and 4
(d) 4 only
120. Planning was considered a prerequisite [UP-PCS 2009]
1. for balanced socio - economic development.
2. for extending the benefits of development in an even manner.
3. for focussing on removal of regional disparities.
4. for maximizing the utilization of available resources.
Select the correct answer from the codes given below :
Codes:
(a) 1 and 2
(b) 1, 2 and 3
(c) 2, 3 and 4
(d) All the four
121. Which one of the following is not a measure of reducing
inequalities? [UP-PCS 2009]
(a) Minimum - Needs Programme
(b) Liberalization of economy

(c) Taxation
(d) Land Reforms
122. National Renewal fund was constituted for the purpose of
[UP-PCS 2010]
(a) providing pension for retiring employees
(b) social security
(c) rural reconstruction
(d) restructuring and modernisation of industries
123. A letter of credit has to be produced by [UP-PCS 2011]
(a) an exporter
(b) an importer
(c) custom authorities
(d) shipping company
124. Import procedure begins with [UP-PCS 2011]
(a) Indent
(b) Mate’s receipt
(c) Marine insurance
(d) Shipping bill
125. The Gandhiyan economy is based on the principle of
[UP-PCS 2013]
(a) Competition
(b) Trusteeship
(c) State Control
(d) None of these
126. The most appropriate measure of a country’s economic growth is
its [UP-PCS 2013]
(a) Gross Domestic Product (GDP)
(b) Net Domestic Product (NDP)
(c) Net National Product (NNP)
(d) Per Capita Product (PCP)
127. Which among the following products is not usually exported from
India? [UP-PCS 2013]
(a) Wheat
(b) Rice
(c) Sugar
(d) Pulses
128. Increasing investment in Human capital leads towards
[UP-PCS 2015]
(a) Proper utilization of resources
(b) Increase in Productivity
(c) Development of skill
129. Which one of the following is not an adverse effect of population growth
in an economy? [UP-PCS 2015]
(a) Increase in the size of working population.
(b) Reduced size of holdings.
(c) Increasing unemployment.
(d) Reduced percapita availability of food grains.
130. Which one of the following is the primary sector of India’s
economy? [UP-PCS 2015]
(a) Agriculture
(b) Industry
(c) Cooperative
131. Which one of the following is the major feature of the Indian
economy [UP-PCS 2015]
(a) A capitalist economy
(b) A socialist economy
(c) A mixed economy
132. Which of the following countries has announced to adopt Chinese Yuan as
its legal currency? [Bihar J.Service 2016]
(a) Greece
(b) Egypt
(c) Zimbabwe
(d) Namibia
133. Match List-I and II— [UGC-2016]
List-I List-II
(Economic Idea) (Economist)
(a) Life Cycle Hypothesis 1. Karl Marx
(b) Tableau Economique 2. Alfred Marshall
(c) Cash Balance Approach 3. Francois Quesnay
(d) organic Composition of Capital 4. F. Modigliani
Select the correct answer from the codes given below–

Codes :
(a) (b) (c) (d)
(a) 1 2 3 4
(b) 4 3 2 1
(c) 4 3 1 2
(d) 2 4 1 3
134. Who among the following developed the ‘Wage-goods model’ of
planning? [UGC-2016]
(a) A.K. Sen
(b) P.C. Mahalanobis
(c) R. Nurkse
(d) C.N. Vakil and P.R. Brahmanand
135. The ‘IRS’ is a liquid financial derivative instrument which can be used to
hedge against or speculate on changes in—
[BOM-PO 2016]
(a) Stock market indices
(b) Exchange rates
(c) Commodity prices
(d) Interest rates
136. The ‘Ease of Doing Business Index’ is prepared and published by
— [BPSC 2017]
(a) World Trade Organization
(b) World Bank Group
(c) United Nations
(d) European Union
137. In India, other than ensuring that public funds are used efficiently and for
intended purpose, what is the importance of the office of the Comptroller
and Auditor General (CAG)?
1. CAG exercises exchequer control on behalf of the Parliament when the
President of India declares national emergency/financial emergency.
2. CAG reports on the execution of projects or programmes by the ministries
are discussed by the Public Accounts Committee.
3. Information from CAG reports can be used by investigating agencies to
press charges against those who have violated the law while
managing public finances.
4. While dealing with the audit and accounting of government companies,
CAG has certain judicial powers for prosecuting those who violate
the law.
(a) 1, 3 and 4 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2, 3 and 4
138. The ‘GDR’ represents ownership of an underlying number of shares of a
foreign company and is used to invest in companies from developing
markets by investors in developed markets. The alphabet ‘G’ in the
abbreviation ‘GDR’ stands for— [IDBI 2016- 2017]
(a) Global
(b) Group
(c) Guaranteed
(d) General
139. The number of times a unit money exchanges hands during a unit period of
time is known as—
[IDBI 2016- 2017]
(a) Velocity of circulation of money
(b) Face of circulation of money
(c) Transactions velocity of money
(d) Income velocity of money
140. ‘TRIMs’ stands for— [UK-PSC 2016]
(a) Trade Related Income Measures
(b) Trade Related Investment Measures
(c) Trade Related Innovative Measures
(d) Trade Related Incentive Measures
141. Human Development Index is a composite index of which of the
following? [UK-PSC 2016]
(a) Nutritional status, quality of life and per capita GDP
(b) Poverty, life expectancy and educational attainment
(c) Life expectancy, educational attainment and per capita income
(d) Inflation, Unemployment and per capita GDP
1. (b) India, among the countries has the lowest GDP per capita.
2. (a) Sustainable development is that development that meets the needs of
the present without compromising the ability of future generations to
meet their own needs. Sustainable development is a case of inter-
generational sensibility in respect of use of natural resources.
Sustainable development - Economic development that is conducted without
depletion of natural resources.
3. (c) Sustainable development is a case of intergenerational equity in respect
of use of natural resources.
Sustainable development is defined as a process of meeting human
development goals while sustaining the ability of natural systems to
continue to provide the natural resources and Eco system services upon
which the economy & society depends.
4. (c) CWC is a Warehousing Agency in India, established in 1957. It
provides logistics support to the agricultural sector. CWC is operating
464 Warehouses across the country with a storage capacity of 10.54
million tonnes providing warehousing services for a wide range of
products ranging from agricultural produce to sophisticated industrial
products.
5. (d) ‘World Investment Report’ is the annual report published by the
UNCTAD. Each year the report covers the latest trends in foreign
direct investment around the world and analyses in depth one selected
topic related to foreign direct investment and development.
World Bank : An international financial Institution that promotes loan
to developing countries for capital programme.
WTO : An Intergovernmental organisation which regulates
international trade. (Headquarters - Geneva)
6. (a) International Monetary Fund is not a part of World Bank. The
International Monetary Fund (IMF) along with World Bank were
created in 1944 at the Bretton Woods Conference . They are known as
Bretton Woods Twins. The IMF promotes international monetary
cooperation and exchange rate stability, facilitates the balanced growth
of international trade.
World Bank Group : 5 organisation
a. IBRD (International Bank for Reconstruction and Development)
b. IDA (International Development Association)
c. IFC (International Finance Corporation)

d. MIGA (Multilateral Investment Guarantee Agency)
e. ICSID (International Centre for Settlement of Investment Disputes).
7. (d) The World Bank was created at the 1944 Bretton Woods Conference,
including the International Monetary Fund (IMF). World Bank
provides loans to developing countries for capital programs. The
Headquarters of World Bank is in Washington D.C.
8. (a) WEF meeting, 2017 was held in Davos : Klosters, Switzerland.
9. (d) CRISIL is the Credit Rating Agency of India. CRISIL’s majority
shareholder is Standard and Poor’s (S&P).
CRISIL: It is a global analytical company providing ratings, research
and risk and policy advisory services. It was founded in 1987,
Headquarters (Mumbai).
10. (b) The World Trade Organization (WTO) is an organization that
supervises and liberalizes international trade. It officially commenced
on 1 January 1995 under the Marrakech Agreement, replacing the
General Agreement on Tariffs and Trade (GATT) The headquarters of
World Trade Organization (WTO) is located in Geneva.
11. (c) Croatia applied for EU membership in 2003 and was in negotiations
from 2005 until 2011.On 9 December 2011 leaders from the EU and
Croatia signed the accession treaty. The country became the 28th EU
member country on 1 July 2013.
European Union : Political & Economic union of 28 member states that are
located primarly in Europe.
12. (a) POSCO is a multinational steel making company headquartered in
Pohang, South Korea. It is the world’s fourth largest steelmaker.
13. (a) The United Kingdom, under Margaret Thatcher started privatisation of
state-owned enterprises as a major state policy. The Ridley report
devised for the Thatcher shadow cabinet, recommended a policy of
breaking up the public sector and dismembering unions.
State owned enterprise: It is a legal entity that undertakes commercial
activities on behalf of the state.
14. (a) The International Development Association (IDA) is an international
financial institution which offers concessional loans and grants to the
world’s poorest developing countries. The IDA is a member of the
World Bank Group and is headquartered in Washington DC. It is
administered by the International Bank for Reconstruction and
Development (IBRD).
IFAD (International fund for agriculture development): It is specialized

agency of united nations dedicated to eradicating rural poverty in
developing countries.
UNDP : (United Nation’s Development Programme) It is the United Nation’s
Global Development Network.
HQ : New York. It advocates for change and connects countries to
knowledge experience & resource to hold people build better life.
UNIDO: (United Nations industrial development organisation) It is
specialized agency in United Nations System, HQ Vienna Austria.
15. (d) WTO : It is Governmental organisation which regulates international
trade. The WTO officially commenced on 1 January 1995 under the
Marrakesh agreement, signed by 123 nations on 15 April 1994,
replacing the General agreement on tarrifs and trade.
16. (d) World Investment Report is published by UNCTAD. It has been
published annually since 1991.Each year’s report covers the latest
trends in foreign direct investment around the World and analysis in
depth one selected topic related to foreign direct investment and
development.
World Economic Forum (WEF) : The world economic forum is a Swiss non-
profit foundation cologny, based in Geneva.
GATT : (General agreement on Tarrifs and trade) : It was a multilateral
agreement regulating international trade GATT was signed by 23
nations in Geueva on Oct. 30, 1947 and took effect from January, 1948.
1 7. (c) The Non-Agricultural Market Access (NAMA) negotiations of the
World Trade Organization are based on the Doha Declaration of 2001
that calls for a reduction or elimination in tariffs, particularly on
exportable goods of interest to developing countries. Developing
countries have formed the NAMA-11 of World Trade Organization.
Member countries are Argentina, Venezuela, Brazil, Egypt, India,
Indonesia, Namibia, Philippines, South Africa and Tunisia.
18. (d) Samuel’s Investor Group is not the rating agency of an economy. It is
Canada based company enganged in financial planning.
Big Three credit rating agency controlling approximately 95% of the ratings
business, Moddy’s investor service & poor’s (S&P) together control
80% of Global market and Fitch Rating controls a further 15%.
19. (b) The Doha Round also called Doha Development Agenda is the latest
round of trade negotiations among the WTO membership. Its
fundamental objective is to improve the trading prospects of
developing countries. The Round was officially launched at the WTO’s

Fourth Ministerial Conference in Doha, Qatar, in Nov, 2001.
UMO : It is an International organization founded in 1945 after the IInd world
was by 51 countries commited to maintaining international peace and
security developing friendly relations among nations & promoting
social progress, better living standard.
20. (d) The Big Three credit rating agencies are Standard & Poor’s (S&P),
Moody’s, and Fitch Group. S&P and Moody’s are based in the US,
while Fitch is dual-headquartered in New York City and London, and is
controlled by the France-based FIMALAC. As of 2013 they hold a
collective global market share of roughly 95 percent with Moody’s and
Standard & Poor’s having approximately 40% each, and Fitch around
15%.
21. (b) International Development Association has offered the concessional
loans and grants to the world’s poorest developing countries. The IDA
is a member of the World Bank Group and is administered by the
International Bank for Reconstruction and Development(IBRD).
22. (d) Major share of ore and mineral exports comes from the export of iron
ore from China.
23. (c) The capital of IMF is generated by contribution of the member nations.
Each member of the IMF is assigned a quota, based broadly on its
relative size in the world economy, which determines its maximum
contribution to the IMF’s financial resources. On joining the IMF, a
country normally pays up to one-quarter of its quota in the form of
widely accepted foreign currencies (such as the U.S. dollar, euro, yen,
or pound sterling) or Special Drawing Rights (SDRs). The remaining
three-quarters are paid in the country’s own currency.
Deficit financing : Govt funding of spending by borrowings.
24. (b) France is the first borrower of fund from the International Monetary
Fund. It borrowed funds from IMF on 8th May 1947.
From March 1st, 1947 IMF begins operation and May 8, 1947 first drawing
from IMF (France).
25. (d) In order to qualify for the “green box”, a subsidy must not distort trade,
or at most cause minimal distortion. These subsidies have to be
government-funded (not by charging consumers higher prices) and
must not involve price support. The blue box is an exemption from the
general rule that all subsidies linked to production must be reduced or
kept within defined minimal (“de minimis”) levels. It covers payments
directly linked to acreage or animal numbers, but under schemes which

also limit production by imposing production quotas or requiring
farmers to set aside part of their land.
Green box :
a. Green subsidy allowed in terms of support eg. MSP or subsidies
b. Measures with minimal impact on trade can be used freely.
c. They include govt. services such as research, dissease control, infrastructure
and food security.
Blue Box
a. Subsidy is also permitted
b. Cover certain direct payment to farmers there farmers are required to limit
production called ‘blue box’ measures.
26. (d) Uruguay session is the final session of the General Agreement on
Tariffs and Trade (GATT).The Uruguay Round lasted from 1986–94. It
was the most ambitious round to date, hoping to expand the
competence of the GATT to important new areas such as services,
capital, intellectual property, textiles, and agriculture. One of the most
significant changes in the Uruguay round was the creation of the World
Trade Organization (WTO).
27. (d) China has the highest share in the world export among the Asian
countries.It exports 27% of GDP as goods and services. However, India
exports 24% of its GDP .
28. (a) If a company exports a product at a price lower than the price it
normally charges on its own home market, it is said to be “dumping”
the product .India is the top user of the anti-dumping measures in the
world in the last decade.
29. (a) Sri Lanka is the first country to sign CEPA with India. India and Sri
Lanka signed the bilateral Comprehensive Economic Partnership
Agreement (CEPA) on August 1, 2008 on the sidelines of the SAARC
Summit.
30. (d) The Global Competitiveness Report (GCR) is a yearly report published
by the World Economic Forum. Since 2004, the Global
Competitiveness Report has ranked countries based on the Global
Competitiveness Index.
31. (c) The Agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS) is an international agreement administered by the
World Trade Organization (WTO). It sets down minimum standards for
many forms of intellectual property (IP) . It was negotiated at the end
of the Uruguay Round of the General Agreement on Tariffs and Trade

(GATT) in 1994.
32. (a) World Economic Outlook is basically a survey conducted and
published by the International Monetary Fund. It is published twice and
partly updated 3 times a year.
33. (d) The S&P 500, or the Standard & Poor’s 500, is a stock market index
based on the market capitalizations of 500 large companies having
common stock listed on the NYSE or NASDAQ.
34. (a) Gulf Cooperation Council, GCC is a political and economic union of
Arab states bordering the Persian Gulf, namely Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia, and the United Arab Emirates.Khaleeji is
the proposed currency of the Gulf Co-operation Council (GCC).
Sucre was the currency of Ecuador between 1884 and 2000.
Dinar: It is a main currency unit in modern circulation in 7 mostly
Islamic and 2 mostly orthodox countries.
35. (a) (China–Russia–India–France) is the correct sequence of the countries
having Foreign Exchange Reserve from high to low.
China has 3,108,500 million USD.
Russia has 430,200 million USD.
India has 401,942 million USD.
France has 153,891 million USD.
36. (a) The Korea Composite Stock Price Index or KOSPI is the stock
Exchange of South Korea. KOSPI was introduced in 1983 with the
base value of 100.
TSEC - Taiwan Stock Exchange corporation.
SET Index - Stock Exchange of Thailand.
37. (d) An External Commercial Borrowings (ECB) is an instrument used in
India to facilitate the access to foreign money by Indian corporations
and PSUs (public sector undertakings). ECBs include commercial bank
loans, buyers’ credit, suppliers’ credit, securitised instruments such as
floating rate notes and fixed rate bonds etc., Export Credit Agencies,
ADB and IFC are the recognised lender of the External Commercial
Borrowings in the international capital market.
38. (b) Special Drawing Rights (SDRs) are supplementary foreign exchange
reserve assets defined and maintained by the International Monetary
Fund (IMF).
39. (c) The International Finance Corporation (IFC) is an international
financial institution that offers investment, advisory, and asset
management services to encourage private sector development in

developing countries. The IFC is a member of the World Bank Group
and is headquartered in Washington, D.C., United States.
40. (c) Collaboration between WTO and the Codex Alimentarius concerns the
use of international food safety standards in the context of the SPS
Agreement.
World standard corporations : High level collaboration between the IEC, ISO
and ITU.
International Federation of Standnard users: Founded in 1974. It is an
independent, non profit, international association of national
organisation for the application & standards.
41. (a) Portfolio investments are passive investments, as they do not entail
active management or control of the issuing company.
42. (b) In China more than 80% national economic conditions are good.
43. (a) According to monetarests in the long run, the phillips curve is vertical.
44. (c) Indian consumers are getting more choice at cheaper rates.
45. (b) SDR’s is are not backed by US dollars.
46. (d) The Mercado Integrado Latinoamericano, more commonly known as
MILA, is a program that integrates the stock exchangemarkets of Chile,
Colombia, Mexico, and Peru.
The three forming members of Leona are
(i) Leona stock exchange
(ii) the Santiago stock exchange
(iii) Colombia stock exchange
47. (c) CADIVI (Comisión de Administración de Divisas - Commission for
the Administration of Currency Exchange) is the Venezuelan
government body which administers legal currency exchange in
Venezuela.
48. (d) MIGA is a member of the World Bank Group. Its mission is to promote
foreign direct investment (FDI) into developing countries to help
support economic growth, reduce poverty, and improve people’s lives.
MIGA Head quarter - Washington DC, membership - 181 countries. Parent
organisation - World Bank, MIGA formation - 1988.
49. (c) The function of IMF include all the function except to serve as the
world central bank.
World Bank serve as the world Central Bank.
50. (a) Officially established on 27 December 1945, when the 29 participating
countries at the conference of Bretton Woods signed its Articles of
Agreement, the IMF was to be the keeper of the rules and the main
instrument of public international management. The Fund commenced
its financial operations on 1 March 1947. IMF approval was necessary
for any change in exchange rates in excess of 10%.
51. (c) The euro was introduced to world financial markets as an accounting
currency on 1 January 1999, replacing the former European Currency
Unit (ECU) at a ratio of 1:1 (US$1.1743).
52. (a) World Bank and International Monetary Fund (IMF) were established
in Dec, 1944 on the recommendation of Bretton Wood Conference.
Five constituents of the world bank are :
IBRD, IFC, IDA, MIGA and ICSID.
53. (a) All the given statements are correct regarding the World Trade
Organization. The members of the GATT signed agreement of Uruguay
Round in 1994 for establishing WTO which officially was constituted
on Jan 1, 1995.
54. (b) WTO-Multi-lateral trade negotiation body.
IDA-Sanction of soft loans
IMF-provides loans to address short-term balance of payment problems.
IBRD-Facilitates lending and borrowing for reconstruction and development.
55. (b)
56. (d) Basel II is the revised international capital framework. The Basel II
framework describes a more comprehensive measure of minimum
standard for capital adequacy that national supervisory authorities are
now working to implement through domestic rule-making and adoption
procedures.
57. (d) The fight on pruning industrial tariffs at the WTO has become more
fierce with a group of developing countries (NAMA-11).
58. (b) Safeguard Mechanism is one of the three types of trade protection
measures taken by WTO members, alongside anti-dumping and
countervailing measures.
59. (b) A Geographical Indication shows that particular agricultural, natural or
manufactured goods originates from a definite geographical territory.
60. (d) Emerging markets are nations with social or business activity in the
process of rapid growth and industrialization.
61. (b) The president of the UN General Assembly, set up a commission of
experts chaired by Joseph Stiglitz, whose mandate is to reflect on the
causes of the crisis, assess its impacts on all countries and suggest
adequate responses to avoid its recurrence and restore global economic

stability.
62. (d) The European Council is the institution of the European Union
responsible for defining the general political direction and priorities of
the union. The European Commission is the executive body of the
European Union.
63. (d) The basic idea of Dialectrical Materialism is that every economic order
grows to a state of maximum efficiency, while at the same time
develops interval contradictions or weaknesses that contribute to its
decay.
64. (b) The ‘look east’ policy, initiated by I.K. Gujral, aimed to forge
economic, social and cultural relations with the East Asia countries via
three approaches. The first of the three approaches was to renew the
political contacts and understanding with the member states of the
ASEAN. The second was to achieve economic interactions such as
science aand technology, investment and trade etc. with these countries
and the third was to strengthen the links of defense and strategy with
them.
65. (c) The IMF is an intergovernmental organization that oversees the global
financial system by taking part in the macroeconomic policies of its
established members, in particular those with an impact on exchange
rate and the balance of payments.
66. (a) The three main objectives of the IMF include the elimination of any
existing exchange controls, the establishment of currency convertibility
and maintenance of stable exchange rates, along with an extension of
payments and multi-lateral trade. The IMF also functions as a credit
institution in foreign exchange and provides machinery for
international consultations.
67. (a)
68. (a) Doing business report is a series of annual reports measuring the
regulations that enhance business activity and those that constrain it. It
is published by World Bank Group.
69. (a)
70. (d)
71. (a)
72. (b) Regarding WTO membership, over 75% of WTO members are from
developing countries, and the membership allows them access to
develop markets at lower tariff.
73. (c) The objectives of the Bretton Woods system is to maintain the
exchange rate by trying its currency to the US dollar and to bridge
temporary imbalances of payments.
74. (d) Non-Agricultural Market Access (NAMA) negotiations of WTO covers
manufacturing products, fuel and mining products, fish and fish
products and forestry products.
75. (b)
76. (b)
77. (d) Agreement on Agriculture (AoA) constitutes of domestic support,
market access and export subsidies.
78. (a)
79. (c)
80. (c)
81. (c)
82. (a)
83. (c)
84. (a)
85. (a) A private good is defined in economics as a good that exhibits these
properties (1) Excludable – the owners in possession of the good can
exercise private property rights, preventing a class of consumers (e.g.,
those who have not paid for it) from using the good or consuming its
benefits (2) Rivalrous – consumptions by one consumer prevents
simultaneous consumption by other consumers. Private goods satisfy
an individual want while public goods satisfy a collective want of the
society.
86. (b)
87. (b)
88. (d) Marshall’s cardinal utility analysis is the oldest theory of demand
propounded in 1920. Indifference curve technique was first of all
invented by Edge-worth and then Hicks and Allen (1936) put forward
the indifference curve approach based on the notion of ordinal utility.
Then Samuelson (1938) propounded Revealed Preference theory and
finally Hicks in 1956 gave Weak Preference ordering theory of
demand.
89. (b) Quantity theory of money was developed by Simon New-comb, Alfred
de Foville, Irving Fisher and Ludwig Von Mises in the latter 19th and
early 20th century, Alfred Marshall, A.C. Pigou and J. M. Keynes
(before he developed his own, eponymous school of thought)
associated with Cambridge University, took a slightly different

approach to the quantity theory, focusing on money demand instead of
money supply. The Baumol-Tobin model is an economic model of the
Transactions demand for money as developed independently by
William Baumol (1952) and James Tobin (1956).
90. (c) After Keynes propounded theory of consumption, Duesenberry gave
relative income hypothesis. Permanent income theory of consumers’
behaviour was put forward by Milton Friedman in 1957 in his book “A
theory of consumption Function”. Modigliani and Ando in 1963 put
forward Life Cycle theory.
91. (c)
92. (b)
93. (b) The current account : The current account is used to mark the inflow
and outflow of goods and services into a country. Earnings on
investments, both public and private, are also put into the current
account.
The capital account : The capital account is where all international capital
transfers are recorded. This refers to the acquisition or disposal of non-
financial assets (for example, a physical asset such as land) and non-
produced assets, which are needed for production but have not been
produced, like a mine used for the extraction of diamonds.
The Official Settlement Account of The Financial Account : In the financial
account, international monetary flows related to investment in business,
real estate, bonds and stocks are documented. Aslo included are
government-owned assets such as foreign reserves, gold, Special
drawing rights (SDRs) held with the International Monetary Fund,
private assets held abroad, and direct foreign investment. Assets owned
by foreigners, private and official, are also recorded in the financial
account.
Errors and Omissions : The errors may be due to statistical discrepancies and
omissions may be due to certain transactions that may not be recorded.
94. (c)
95. (b)
96. (c)
97. (b)
98. (a)
99. (b)
100. (b)
101. (b)
102. (c)
103. (a) Functional Finance is a heterodox macroeconomic theory developed by
Abba Lerner during World War II that seeks to eliminate economic
insecurity (i.e., the business cycle) through government intervention in
the economy. Functional finance emphasizes the end result of
interventionist policies on the economy and is based on three major
beliefs:
1. It is the role of government to stave off inflation and unemployment by
controlling consumer spending through the raising and lowering of
taxes.
2. The purpose of government borrowing and lending is to control interest
rates, investment levels and inflation.
3. The government should print, hoard or destroy money as it sees fit to achieve
these goals.
104. (a) In WTO terminology, subsidies in general are identified by “boxes”
which are given the colours of traffic lights: green (permitted), amber
(slow down — i.e. be reduced), red (forbidden). In agriculture, things
are, as usual, more complicated. The Agriculture Agreement has no red
box, although domestic support exceeding the reduction commitment
levels in the amber box is prohibited; and there is a blue box for
subsidies that are tied to programmes that limit production.
In order to qualify for the “green box”, a subsidy must not distort trade, or at
most cause minimal distortion. These subsidies have to be government-
funded (not by charging consumers higher prices) and must not involve
price support. They tend to be programmes that are not directed at
particular products, and include direct income supports for farmers that
are not related to (are “decoupled” from) current production levels or
prices. “Green box” subsidies are therefore allowed without limits,
provided they comply with relevant criteria.
105. (a) The theory of critical minimum effort is associated with the name of
Harvey Leibenstein. The theory is based on the relationship between
the three factors, viz. (i) per capita income, (ii) population growth, and
(iii) investment. Leibenstein identified population also an income-
depressing factor (or a), whereas investment is an income-generating
factor.
106. (c) (i) Friedman’s Quantity Theory of Money 1923
(ii) Fisher’s Equation of Exchange 1911
(iii) Cambridge Equation of Exchange 1917

(iv) Don Patinkins Theory of Money 1950
107. (b) The Bretton Woods twins refers to the two multilateral organizations
created at the Bretton Woods Conference in 1944. They are: The World
Bank, The International Monetary Fund.
108. (b) Hirschman introduces the concept of backward and forward linkages.
A forward linkage is created when investment in a particular project
encourages investment in subsequent stages of production. A backward
linkage is created when a project encourages investment in facilities
that enable the project to succeed. Normally, projects create both
forward and backward linkages. Investment should be made in those
projects that have the greatest total number of linkages. Projects with
many linkages will vary from country to country; knowledge about
project linkages can be obtained through input and output studies.
109. (c) Fisher has discovered weighted index number in which he try to
calculate best index number because he has taken both current and past
years quantity as the base of price index number. The main quality of
fisher index number is that it qualify both time reversal test and factor
reversal test.
110. (c) In monetary economics, the quantity theory of money states that money
supply has a direct, proportional relationship with the price level. For
example, if the currency in circulation increased, there would be a
proportional increase in the price of goods.
111. (a) The European Stability Mechanism (ESM) is an important component
of the comprehensive EU strategy designed to safeguard financial
stability within the euro area.
112. (b) Phases of Industrial Revolution:
A. First phase- 2. Rise of Cotton mill
C. Second phase- 1. Rise of steel, chemicals, electricity industries.
B. Third phase- 3. Rise of steam engine
D. Fourth phase- 4. Rise of petrochemicals, jet aircraft, computers
113. (a) All statements are correct.
114. (c) On the natural side England has in abundance three important
commodities - water, iron and coal. Water in Britain’s numerous hilly
districts provides the power to drive mills in the early stages of
industrialization; the rivers, amplified from 1761 by a developing
network of canals, facilitate inland transport in an age where roads
were only rough tracks; and the sea, never far from any parts of Britain,
makes transport of heavy goods easy between coastal cities.
115. (b) The WBG came into formal existence on 27 December 1945 following
international ratification of the Bretton Woods Agreements. The
Group’s headquarters are in Washington, D.C. It was created in 1944 to
help Europe rebuild after World War II. Its mission is defined by two
goals - to end extreme poverty by 2030 and to boost prosperity among
the poorest 40 percent in low- and middle-income countries. The World
Bank comprises of five institutions. They are :
(1) International Bank for Reconstruction and Development(IBRD),
(2) The International Development Association (IDA),
(3) The International Finance Corporation (IFC),
(4) The Multilateral Investment Guarantee Agency (MIGA)
(5) International Centre for Settlement of Investment Disputes(ICSID).
116. (a) The IMF is a UN’s specialized agency. IMF was formed in 1944 at the
Bretton Woods Conference to promote international economic
cooperation, international trade, employment, and exchange-rate
stability, including by making financial resources available to member
countries to meet balance-of-payments needs.
117. (a) The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. At its
heart are the WTO agreements, negotiated and signed by the bulk of
the world’s trading nations and ratified in their parliaments. The goal is
to help producers of goods and services, exporters and importers
conduct their business. The Uruguay Round led to the creation of the
World Trade Organization, with GATT remaining as an integral part of
the WTO agreements. The agreements fall into a simple structure with
six main parts, intellectual property (Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)) was one of them.
118. (c)
119. (d) In 1971 NEP partially revoked the complete nationalization of Industry.
120. (d) Indian planning, ever since its inception, has attempted to meet the
following objectives of multi-faceted development: Securing an
increase in national income, Increasing the quantum of employment for
the maximum possible utilization of manpower and other resources,
Speeding up the development of relatively backward regions and
promoting balanced regional development and Mitigating the
inequalities of income and wealth and regulating the concentration of

economic power.
121. (d) Liberalization of economy is not a measure of reducing in equalities.
Infact it is a way which connects Indian economy with the world
economy.
122. (b) The national renewal fund was constituted for the purpose of social
security to avoid the worker from the bad effect of technology
advancement.
123. (b) A letter of credit is a written commitment to pay, by a buyer’s or
importer’s bank (called the issuing bank) to the seller’s or exporter’s
bank.
124. (a) Import Procedure begins with indent because indent importer gives
Supply order to exporter.
125. (b) Trusteeship principle is one of the third principles of Gandhian
economic thought.
126. (d) Per capita product (PCP) or Per Capita Income is most appropriate
measure of a country’s economic growth.
127. (d) Export of all Pulses banned (according to the Economic Survey 2016-
17) except of Kabuli Channa and up to 10000 MT’s of organic Pulses
and Lentils.
128. (d)
129. (a) Increase of size of working population is one of the positive effects of
population growth in an economy. Human resources increases with
increase in population.
130. (a) The Primary sector of the economy is the change of natural resources
into primary products. Agriculture comes in the Primary sector of
India’s economy.
131. (c) Indian economy is a true example of complete mixed economy. This
means both private and public sectors co-exist and function here,
simultaneously.
132. (c) Zimbabwe government announced that it would officially make the
Chinese Yuan as legal currency after Beijing confirmed that it would
cancel $40m in debts. As per the decision, Yuan will be a function of
trade between China and Zimbabwe and acceptability with customers
in Zimbabwe.
133. (b) The economic idea “Life Cycle Hypothesis” was given by
F.Modigliani. Francois gave the idea of “Tableau Economic”. The idea
of “Cash Balance Approach” was given by Alfred and Karl Marx gave
the idea of “Organic Composition of Capital”
134. (d) The major contributions of C.N. Vakil to Economics are; Planning,
Wage-Goods Model, Role of Technological Progress, Consumption
Multiplier, Poverty, Deficit Financing and Public Expenditure,
International Trade, Extension Work and Inflation.
135. (d) An interest rate swap (IRS) is a liquid financial derivative instrument in
which two parties agree to exchange interest rate cash flows.
136. (b) The Ease of Doing Business Index is prepared by World Bank Group.
137. (c) The CAG report is kept before the Parliament and is examined by the
Public Accounts Committee of Parliament, which brings to the notice
of Parliament any discrepancies found by it.
138. (a) Global Depository Receipt.
139. (a) The number of times a unit of money changes hands during the unit
period is called the velocity of circulation of money.
140. (b) The Agreement on Trade-Related Investment Measures (TRIMs) are
rules that apply to the domestic regulations a country applies to foreign
investors, often as part of an industrial policy. The objective of TRIMs
is to ensure fair treatment of investment in all member countries.
141. (c) The Human Development Index (HDI) is a composite statistic
(composite index) of life expectancy, education, and per capita income
indicators. The HDI was developed by Pakistani economist, Mahbubul
Haque, for the UNDP.

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• Corporate Office : 45, 2nd Floor, Maharishi Dayanand Marg,

For further information about the books from DISHA,

• Demand & Supply/Price/Revenue & Cost

• Proﬁt & Loss/Recession & Depression

• Market, Factors of Produc on & Inﬂa on

2. Public Finance in India 9 - 29

• Budget, Deﬁcit Financing & Government Subsidies

• Taxes: Types & Methods

• Banking & Insurance

• Stock exchange & SEBI

• Na onal Income & Human Development Index

• Five year Plans

• Poverty & Unemployment

• Industries: Manufacturing & Service Sectors

4. Business & Foreign Trade of India 63 - 69

• Business/ En es Types of Companies

• Business/Corporate Governance/ Terms

• Foreign Trade Policies

• Foreign Exchange Services

• Special Economic Zones & FDI

Demand & Supply/Price/Revenue & Cost

(a) Ministry of agriculture

(c) Cost of energy

1. When marginal revenue is positive, total revenue increases with

Profit & Loss/Recession & Depression

2. Increasing the government spending.

Market, Factors of Production & Inflation

(c) Both 1 and 2

(a) wholesale price Index Number

(c) Money volume

4. The terms such as ‘ Pareto Efficiency’, ‘Pareto Optimality’ and

1. (c) Devaluation is a deliberate downward adjustment to the value of a

28. (c) The process of curing inflation by reducing money supply is

32. (d) Inflation in India is measured on the Wholesale Price Index

faster than long-term aggregate supply, economic growth will be

conditions, the general price level within an economy increases

Budget, Deficit Financing & Government Subsidies

Which of the statements given above is/are correct?

List I (Term) List II (Explanation)

(d) Levying of higher duties on exports

Taxes: Types & Methods

Select the correct answer using the code given below:

(c) Philips curve

(b) Corporation tax

(d) curb the use of black money in the economy

52. MODVAT is related to [UP-PCS 2011]

(d) Price elasticity of demand for it is low

Banking & Insurance

(a) placement of funds

(c) Central Bank Reserve (CBR)

(d) Neither 1 nor 2

(a) Fourth Five Year Plan

107. Why is the offering of ‘teaser loans’ by commercial banks a cause of

111. Consider the following statements with regard to Statutory Liquidity

(c) the RBI gives credit to the commercial banks.

(d) Commercial Banks, Regional Rural Banks and Co-operative Banks

143. A currency which either has a missing portion or is composed of more

(a) Indian Security Press (ISP), Nasik

(a) Postal order or ‘p-money’ issued by any bank or post office

(b) 1 and 2 only

Stock exchange & SEBI

(d) Any lender whether by making a loan or buying a bond.

1. (a) Developmental Expenditure - the expenditure which is incurred