Easy Tutorial
For Competitive Exams
UPSC Economics Page: 2
4199.The balance of payments of a country is a systematic record of
all import and transactions of a during a given period normally a year
goods exported from a country during a year
economic transaction between the government of one country to another
capital movements from one country to another
4200.The Reserve Bank of India regulates the commercial banks in matters of
1.liquidity of assets
2.branch expansion
3.merger of banks
4.winding-up of banks
5.Select the correct answer using the codes given below.
1 and 4 only
2, 3 and 4 only
1, 2 and 3 only
1, 2, 3 and 4
4201.An increase in the Bank Rate generally indicates that the:
market rate of interest is likely to fall
Central Bank is no longer making loans to commercial banks
Central Bank is following an easy money policy
Central Bank is following a tight money policy
4202.In India, deficit financing is used for raising resources for
economic development
redemption of public debt
adjusting the balance of payments
reducing the foreign debt
4203.Which of the following constitute Capital Account?
1.Foreign Loans
2.Foreign Direct Investment
3.Private Remittances
4.Portfolio Investment
Select the correct answer using the codes given below.
1, 2 and 3
1, 2 and 4
2, 3 and 4
1, 3 and 4
4204.Consider the following statements :
1.Inflation benefits the debtors.
2.Inflation benefits the bond-holders.
3.Which of the statements given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
4205.Disguised unemployment generally means
large number of people remain unemployed
alternative employment is not available
marginal productivity of labour is zero
productivity of workers is low
4206.The correct sequence of these decreasing order of Liquidity is
1-4-3-2
4-3-2-1
2-3-1-4
4-1-3-2
4207.In the context of Indian economy,Open Market Operations' refers to:
borrowing by scheduled banks from the RBI
lending by commercial banks to industry and trade
purchase and sale of government securities by the RBI
None of the above
4208.Priority Sector Lending by banks in India constitutes the lending to:
agriculture
micro and small enterprises
weaker sections
All of the above
4209.A rise in general level of prices may be caused by:
1.an increase in the money supply
2.a decrease in the aggregate level of output
3.an increase in the effective demand
Select the correct answer using the codes given below.
1 only
1 and 2 only
2 and 3 only
1, 2 and 3
4210.Which one of the following groups of items is included in India's foreign-exchange reserves?
Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries
Foreign-currency assets, gold holdings of the RBI and SDRs
Foreign-currency assets, loans from the World Bank and SDRs
Foreign-currency assets, gold holdings of the RBI and loans from the World Bank
4211.Which one of the following is likely to be the most inflationary in its effect?
Repayment of public debt
Borrowing from the public to finance a budget deficit
Borrowing from banks to finance a budget deficit
Creating new money to finance a budget deficit
4212.Supply of money remaining the same when there is an increase in demand for money, there will be:
a fall in the level of prices
an increase in the rate of interest
a decrease in the rate of interest
an increase in the level of income and employment
4213.Economic growth in country X will necessarily have to occur if
there is technical progress in the world economy
there is population growth in X
there is capital formation in X
the volume of trade grows in the world economy
4214.The national income of a country for a given period is equal to the:
total value of goods and services produced by the nationals
sum of total consumption and investment expenditure
sum of personal income of all individuals
money value of final goods and services produced
4215.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
Select the correct answer using the codes given below:
1 and 2 only
2 only
1 and 3 only
1, 2 and 3
4216.The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to
banking operations
communication networking
military strategies
supply and demand of agricultural products
4217.What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1.It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2.It enables the beneficiaries in the rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
1 only
2 only
Both 1 and 2
Neither 1 nor 2
4218.If the interest rate is decreased in an economy, it will
decrease the consumption expenditure in the economy
increase the tax collection of the Government
increase the investment expenditure in the economy
increase the total savings in the economy
4219.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.
1 only
1 and 2 only
2 and 3 only
1, 2, 3 and 4
4220.If the interest rate is decreased in an economy, it will
decrease the consumption expenditure in the economy
increase the tax collection of the Government
increase the investment expenditure in the economy
increase the total savings in the economy
4221.With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
1.Defense -expenditure
2.Interest payments
3.Salaries and pensions
4.Subsidies
Select the correct answer using the code given below.
1 only
2 and 3 only
1, 2, 3 and 4
None
4222.The sales tax you pay while purchasing a toothpaste is a
tax imposed by the Central Government.
tax imposed by the Central Government but collected by the State Government
tax imposed by the State Government but collected by the Central Government
tax imposed and collected by the State Government
4223.The main objective of the 12th Five-Year Plan is
inclusive growth and poverty reductions
inclusive and sustainable growth
sustainable and inclusive growth to reduce unemployment
Faster, sustainable and more inclusive growth.
4224.What does venture capital mean?
A short-term capital provided to industries
A long-term start-up capital provided to new entrepreneurs
Funds provided to industries at times of incurring losses
Funds provided for replacement and renovation of industries
4225.With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
1.Balance of trade
2.Foreign assets
3.Balance of invisibles
4.Special Drawing Right
5.elect the correct answer using the code given below.
1 only
2 and 3
1 and 3
1, 2 and 4
4226.Which of the following organizations brings out the publication known as 'World Economic Outlook'?
The International Monetary Fund
The United Nations Development Programme
The World Economic Forum
The World Bank
4227.India is regarded as a country with "Demographic Dividend". This is due to:
Its high population in the age group below 15 years
Its high population in the age group of 15-64 years
Its high population in the age group above 65 years
Its high total population
4228.Consider the following specific stages of demographic transition associated with economic development :
1. Low birthrate with low death rate
2. High birthrate with high death rate
3. High birthrate with low death rate
4. Select the correct order of the above stages using the codes given below :
1, 2, 3
2, 1, 3
2, 3, 1
3, 2, 1
4229.To obtain full benefits of demographic dividend, what should India do?
Promoting skill development
Introducing more social security schemes
Reducing infant mortality rate
Privatization of higher education
4230.Which of the following is not included under the money market?
RBI
Commercial banks
SEBI
None of the above
Explanation:

Money market includes RBI, commercial banks and other financial institutions. SEBI belongs to capital market.
4231.Consider the following statements and identify the right ones.
1. Call money market is a short term market
2. Money can be borrowed for not less than a week
1 only
2 only
both
none
Explanation:

It is a very short term market, also known as overnight market as money can be borrowed or lent for a day.
4232.Consider the following statements and identify the right ones.
1.Treasury bills are used by government to get long term loans
2.The maturity period of a treasury bill in India ranges from 14 days to 365 days
1 only
2 only
both
none
Explanation:

Treasury bills are used by government to get short term loans
4233.Who discounts the treasury bills?
RBI
Commercial banks
SEBI
Finance Ministry
Explanation:

RBI as an agent of the Government of India discounts the treasury bills.
4234.Consider the following statements and identify the right ones.
1.Treasury bills can be issued by all the states
2.They are not used for OMO
1 only
2 only
both
none
Explanation:

Treasury bills cannot be issued by the states. They are used by the RBI for open market operations
4235.Consider the following statements and identify the right ones.
1 Trading of treasury bills is not allowed in the market
2 The ad hoc treasury bills have been replaced by Ways and Mean Advances System
1 only
2 only
both
none
Explanation:

Trading of treasury bills is allowed in the market.
4236.Consider the following statements and identify the right ones.
1 Commercial bills are not tradable in market
2 It is raised by the payer and accepted for payment by the payee on some future date
I only
ii only
both
none
Explanation:

Commercial bills are raised by the payee and accepted for payment by the payer on some future date. They are tradable in market.
4237.Consider the following statements and identify the right ones.
1 The certificate of deposits are issued at a discount to the face value
2 The issuing institution can repurchase it before maturity period.
1 only
2 only
both
none
Explanation:

The issuing institution cannot repurchase it before maturity period.
4238.Which of the following is a criterion for issuing commercial paper market?
1. It should be a listed company
2. It should have a working capital of 5 crores at least
1 only
2 only
1 and 2
None
Explanation:

Commercial papers are short term borrowing instruments that are used by corporates.
4239.Consider the following statements and identify the right ones.
1. The Money Market Mutual Fund aims at providing investment opportunities to small investors to enter into markets
2. Banks can get their bills rediscounted directly by DFHI
a. 1 only
b. 2 only
c. both
d. none
The market for transaction of government securities is called
Gilt-edged market
Industrial securities market
Call money market
None of the above
Explanation:

The market for transaction of government securities is called gilt-edged market.
4240.Consider the following statements and identify the right ones.
1. In debentures, maturity period is pre-decided.
2. Companies cant issue debentures.
1only
2 only
both
none
Explanation:

Companies can issue debentures to raise capital and in debentures, maturity period and interest rate too is pre-decided.
4241.Consider the following statements and identify the right ones.
1. NBFCs can accept demand deposits
2. Deposit insurance facility of DICGC is available for NBFC depositors.
1 only
1 only
both
none
Explanation:

NBFCs cannot accept demand deposits. Deposit insurance facility of DICGC is not available for NBFC depositors.
4242.Consider the following statements and identify the right ones.
1. The RBI registers and regulates brokers and sub-brokers working in the securities market.
2. RBI also prevents insider trading in the securities market.
1 only
2 only
both
none
Explanation:

The SEBI registers and regulates brokers and sub-brokers working in the securities market. SEBI also prevents insider trading in the securities market.
4243.Consider the following statements and identify the right ones.
1. SEBI was given a statutory status on the recommendation of Narasimhan Committee
2. The chairman and members are appointed by the government and RBI
1 only
2 only
both
none
Explanation:

SEBI regulates stock markets and other markets in the country.
4244.Who issues metallic coins in India?
RBI
Government of India
Banks and financial institutions
Any of the above can issue it.
Explanation:

The Government of India issues metallic coins in India. Coins, paper currency and deposits are the components of money supply in India.
4245.Which of the following is issued by RBI?
Currency notes
Coins
Both
None
Explanation:

Currency notes are issued by RBI. The Government of India issues metallic coins in India.
4246.Consider the following statements and identify the right ones.
1. Deposits are created by banks and financial institutions.
2. They constitute the major source of money supply in India.
1 only
2 only
both
none
Explanation:

Coins, paper currency and deposits are the components of money supply in India.
4247.Which of the following about money supply measure adopted in 1977 is correct?
M2= M1 +demand deposits with post offices
M3= M1 +term deposits with banks
M4=M3+total deposits with post offices
All the above
Explanation:

These are the measures of money supply adopted by RBI in 1977.
4248.Which of the following is most liquid measure of money supply in India?
M1
M2
M3
M4
Explanation:

M1= cash with the public+ demand deposits with banks+ other deposits with RBI
Share with Friends