Q151.An economic system combining private and state enterprise is called as _____
(a) Market economy
(b) Centrally planned economy
(c) Private economy
(d) Mixed economy
Answer
Ans.(d)
Sol. In a mixed economy, private and public sectors are involved in economy as two side of one coin. The government directs economic activity in some socially important areas of the economy, the rest being left to the price mechanism to operate.
Q152.What was the main motive of Third Five Year Plan in India?
(a) Rural development
(b) Agriculture
(c) Financial inclusion
(d) Economic reform
Answer
Ans.(b)
Sol. The 3rd five year plan laid considerable stress on the agricultural sector. However, with the short lived Sino Indian War of 1962 India diverted its attention to the safety of the country. Again, during the period 1965 to 1966, owing to Green Revolution, once again agriculture attracted attention.
Q153.When there is only one buyer and one seller of product, it is called _____ situation.
(a) Public monopoly
(b) Bilateral monopoly
(c) Franchised monopoly
(d) Monopsony
Answer
Ans.(b)
Sol. A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).
Q154. Which among the following is not an account under Balance of Payment (BOP)?
(a) Current Account
(b) Capital Account
(c) Official Reserves Account
(d)Financial account
Answer
Ans.(c)
Sol. Official Reserves Account is not an account under Balance of Payments(BOP).
Q155.Who gave the 'General Equilibrium Theory'?
(a) J. M. Keynes
(b) Leon Walras
(c) David Ricardo
(d) Adam Smith
Answer
Ans.(b)
Sol. French economist Leon Walras in his pioneering work Elements of Pure Economics in 1874 gave General Equilibrium theory. It attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium.
Q156. What is the accepted average Calorie requirement for rural area in India?
(a) 2100
(b) 2200
(c) 2300
(d) 2400
Answer
Ans.(d)
Sol. The nutritional requirement recommends a national norm of 2,400 kilo calories a day for rural areas and 2,100 calories a day for urban areas, the difference being attributed to the lower rate of physical activity in urban areas.
Q157.At which rate, Reserve Bank of India borrows money from commercial banks?
(a) Bank Rate
(b) Repo Rate
(c) Reverse Repo Rate
(d) Statutory Liquidity Rate
Answer
Ans.(c)
Sol. Reverse Repo rate is the rate at which RBI borrows money from the commercial banks.It is a monetary policy instrument which can be used to control the money supply in the country.
Q158.Movement along the supply curve is known as ______ .
(a) Contraction of supply
(b) Expansion of supply
(c) Increase in supply
(d) Expansion and contraction of supply
Answer
Ans.(d)
Sol. A movement along the supply curve will occur when the price of the good changes and the quantity supplied changes in accordance to the original supply relationship. In other words, a movement alongs the supply curve is known as Expansion and Contraction of supply.
Q159. Lowering of value of currency relative to a foreign reference currency is called _________.
(a) Devaluation
(b) Revaluation
(c) Down valuation
(d) Negative valuation
Answer
Ans.(a)
Sol. Devaluation is a deliberate downward adjustment to the value of a country's currency relative to another currency.
Q160. If demand curve for camping tents is D = 100000 - 17P and supply curve is S = 50000 + 8P, find the equilibrium Price?
(a) Rs. 1000
(b) Rs. 2000
(c) Rs. 4000
(d) Rs. 500
Answer
Ans.(b)
Sol. At equilibrium demand is equal to supply.
Q161. Fiscal policy in India is formulated by -
(a) Reserve Bank of India
(b) Planning Commission
(c) Finance Ministry
(d) SEBI
Answer
Ans.(c)
Sol. Fiscal policy in India is formulated by Finance Ministry.
Q162. What is MUDRA?
(a) Development and Refinance Agency
(b) Scheme for Agricultural Insurance
(c) New Planet Discovered
(d) Development and Regulatory Authority for Urban Township
Answer
Ans.(a)
Sol. Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector financial institution in India. It provides loans at low rates to micro-finance institutions and non-banking financial institutions which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.
Q163. Lorenz curve shows
(a) Inflation
(b) Unemployment
(c) Income distribution
(d) Poverty
Answer
Ans.(c)
Sol. The Lorenz curve is a graphical representation of income inequality or wealth inequality developed by American economist Max Lorenz in 1905.
Q164.Who takes the decision regarding the savings and loan activities in a Self Help Group (SHG)?
(a) Private Bank
(b) Reserve Bank of India
(c) Members of Group
(d) Non-Government Organizations
Answer
Ans.(c)
Sol. Group members take the important decisions of SHG.The group owes responsibility for the repayment of loans. Other members of the group follow seriously if in case of non-repayment of loan by one member. The groups decides as regards the loans- to be granted-the purpose, amount, interest to be charged, repayment schedule.
Q165. "World Economic Outlook" report is published by which of the following ?
(a) IMF
(b) World Bank
(c) RBI
(d) UNCTAD
Answer
Ans.(a)
Sol. World Economic Outlook" report by the International Monetary Fund (IMF) contains analysis and projections of the integral elements of the IMF's surveillance of economic developments and policies in its member countries, and of the developments in the global financial markets and economic system.
Q166. The rate of tax increase as the amount of the tax base increases is called?
(a) Proportional tax
(b) Progressive tax
(c) Regressive tax
(d) Degressive tax
Answer
Ans.(b)
Sol. The rate of tax increase as the amount of the tax base increases is called Progressive tax.
Q167. HDI is an aggregate measure of progress in which of the three dimensions?
(a) Health, Education, Income
(b) Food Security, Employment, Income
(c) Agriculture, Industry, Services
(d) Height, Weight, Colour
Answer
Ans.(a)
Sol. The Human Development Index (HDI) is a composite statistic (composite index) of life expectancy(health), education, and per capita income indicators, which are used to rank countries into four tiers of human development.
Q168. The operational period of 12th Five Year Plan is -
(a) 2007-12
(b) 2012-17
(c) 2015-20
(d) 2005-10
Answer
Ans.(b)
Sol. The operational period of 12th Five Year Plan is 2012-2017. It aims at a growth rate of 8%.
Q169. Find Point elasticity of demand, if quantity demanded falls from 1050 to 950 when of the item is increased from Rs. 250 to Rs. 290?
(a) –0.65
(b) –0.6
(c) 0.68
(d) 0.6
Answer
Ans.(a)
Sol. Elasticity = (%change in the quantity) / (% change in the price)
= (-100/950)×(250/40)
=-0.65.
Q170.If Money supply growth is faster than real GDP growth, it results in _____.
(a) Inflation
(b) Deflation
(c) Budget surplus
(d) Budget deficit
Answer
Ans.(a)
Sol. If Money supply growth is faster than real GDP growth, it results in Inflation.
Q171. During a recession ________
(a) Producers will be cautiously optimistic
(b) There will be decrease in inventory
(c) There will be capacity under utilization
(d) There will be expansion in bank credit
Answer
Ans.(c)
Sol. In economics, a recession is a business cycle contraction which results in a general slowdown in economic activity. During a recession there will be capacity under utilization.
Q172.A price floor is _____.
(a) A maximum legal price
(b) A minimum legal price
(c) The price where demand equals supply
(d) The price where elasticity of demand equals elasticity of supply
Answer
Ans.(b)
Sol. A price floor is the lowest legal price a commodity can be sold at. Price floors are used by the government to prevent prices from being too low.
Q173.If a person's income increases from Rs 20 lakhs per year to Rs 24 lakhs per year and tax increases from Rs 3,50,000 to Rs 4,00,000 the marginal tax rate is
(a) 8 percent
(b) 12.5 percent
(c) 10 percent
(d) 15 percent
Answer
Ans.(b)
Sol. Marginal Tax Rate = (50000/400000)×100
=12.5.
Q174.A minimum wage _____.
(a) Is the price floor below which workers may not sell their labor
(b) Is set at a price below the equilibrium wage
(c) Creates a price ceiling below which the wage cannot legally go
(d) Decreases unemployment
Answer
Ans.(a)
Sol. A minimum wage is the price floor below which workers may not sell their labor.
Q175. Which among the following does not count in the development expenditure of government?
(a) Expenditure on economic services
(b) Expenditure on social services
(c) Grant to states
(d) Defence expenditure
Answer
Ans.(d)
Sol. Developmental expenditure refers to the expenditure of the government which helps in economic development by increasing production and real income of the country.It doesn’t include Defence expenditure.
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