Exercise 1

Question 1 :

The central banking functions in India are performed by the

Central Bank of India
Reserve Bank of India
State Bank of India
Punjab National Bank


A). I, II
B). II
C). I
D). II, III
Answer : Option B

Question 2 :

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
Answer : Option A

Question 3 :

ICICI is the name of a


A). chemical industry
B). bureau
C). corporation
D). financial institution
Answer : Option D

Question 4 :

Gilt-edged market means


A). bullion market
B). market of government securities
C). market of guns
D). market of pure metals
Answer : Option B

Question 5 :

In the last one decade, which one among the following sectors has attracted the highest foreign direct investment inflows into India?


A). Chemicals other than fertilizers
B). Services sector
C). Food processing
D). Telecommunication
Answer : Option D

Question 6 :

Devaluation of a currency means


A). reduction in the value of a currency vis-a-vis major internationally traded currencies
B). permitting the currency to seek its worth in the international market
C). fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies
D). fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners
Answer : Option A

Question 7 :

In the second nationalization of commercial banks, ___ banks were nationalized.


A). 4
B). 5
C). 6
D). 8
Answer : Option C

Question 8 :

Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves

interest payments
subsidies
defence
irrigation


A). I, II
B). I
C). I, II, III
D). II, III, IV
Answer : Option C

Question 9 :

Depreciation means


A). closure of a plant due to lock out
B). closure of a plant due to labour trouble
C). loss of equipment over time due to wear and tear
D). destruction of a plant in a fire accident
Answer : Option C

Question 10 :

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
Answer : Option D

Question 11 :

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
D). None of the above
Answer : Option C

Question 12 :

India changed over to the decimal system of coinage in


A). April 1995
B). April 1957
C). April 1958
D). April 1959
Answer : Option B

Question 13 :

The association of the rupee with pound sterling as the intervention currency was broken in


A). 1990
B). 1991
C). 1992
D). 1993
Answer : Option C

Question 14 :

On which one of the followings is the benefits received principle of taxation to achieve optimality bases?


A). Marginal benefit received
B). Total benefit received
C). Average benefit received
D). Ability to pay for the benefit
Answer : Option D

Question 15 :

One of the reasons for India's occupational structure remaining more or less the same over the years has been that


A). investment pattern has been directed towards capital intensive industries
B). productivity in agriculture has been high enough to induce people to stay with agriculture
C). ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture
D). people are largely unaware of the significance of transition from agriculture to industry for economic development
Answer : Option A

Question 16 :

Gross domestic capital formation is defined as


A). flow of expenditure devoted to increased or maintaining of the capital stock
B). expenditure incurred on physical assets only
C). production exceeding demand
D). net addition to stock after depreciation
Answer : Option D

Question 17 :

On July 12, 1982, the ARDC was merged into


A). RBI
B). NABARD
C). EXIM Bank
D). None of the above
Answer : Option B

Question 18 :

Which of the following is the most appropriate cause of exports surplus?


A). Country's exports promotion value
B). Country's stringent import policy
C). Developments in national and international markets
D). None of the above
Answer : Option C

Question 19 :

If the cash reserve ratio is lowered by the RBI, its impact on credit creation will be to


A). increase it
B). decrease it
C). no impact
D). None of the above
Answer : Option A

Question 20 :

Which of the following items would not appear in a company's balance sheet?


A). Value of stocks of raw materials held
B). Total issued capital
C). Revenue from sales of the company's products
D). Cash held at the bank
Answer : Option C

Question 21 :

The currency convertibility concept in its original form originated in


A). Wells Agreement
B). Bretton Woods Agreement
C). Taylors Agreement
D). None of the above
Answer : Option B

Question 22 :

In the state of India, the State Financial Corporation have given assistance mainly to develop


A). agricultural farms
B). cottage industry
C). large-scale industries
D). medium and small-scale industries
Answer : Option D

Question 23 :

The central co-operative banks are in direct touch with


A). farmers
B). state co-operative banks
C). land development banks
D). central government
Answer : Option B

Question 24 :

The first wholly Indian Bank was set up in


A). 1794
B). 1894
C). 1896
D). 1902
Answer : Option B

Question 25 :

States earn maximum revenue through


A). land revenue
B). custom revenue
C). commercial taxes
D). excise duties on intoxicants
Answer : Option C