Exercise 3

Question 1 :

How many banks were nationalized in 1969?


A). 16
B). 14
C). 15
D). 20
Answer : Option B

Question 2 :

In India, the first bank of limited liability manages by Indians and founded in 1881 was


A). Hindustan Commercial Bank
B). Oudh Commercial Bank
C). Punjab National Bank
D). Punjab and Sind Bank
Answer : Option B

Question 3 :

In India, inflation measured by the


A). Wholesale Price Index number
B). Consumers Price Index for urban non-manual workers
C). Consumers Price Index for agricultural workers
D). National Income Deflation
Answer : Option A

Explanation :

Two major measures for inflation, which are widely used, are Wholesale Price Index (WPI) and Consumer Price Index (CPI). WPI measures the increase in the prices of a fixed basket of goods prevailing in the wholesale market while CPI measures the increase in the prices of essential commodities purchased by an average consumer prevailing in the retail market. Measured weekly, WPI is the primary inflation measure in India.


Question 4 :

The annual yield from which of the following Union Government taxes is the highest?


A). Custom duties
B). Corporation tax and income tax
C). Inheritance tax, wealth tax, interest tax and gift tax
D). Excise duties
Answer : Option D

Question 5 :

The average rate of domestic savings (gross) for the Indian economy is currently estimated to be in the range of


A). 15 to 20 percent
B). 20 to 25 percent
C). 25 to 30 percent
D). 30 to 35 percent
Answer : Option B

Question 6 :

Subsidies mean


A). payment by government for purchase of goods and services
B). payment made by business enterprises to factors of production
C). payment made by companies to shareholders
D). payment made by the government to business enterprises, without buying any goods and services
Answer : Option D

Question 7 :

National expenditure includes


A). consumption expenditure
B). investment expenditure
C). government expenditure
D). All of the above
Answer : Option D

Question 8 :

Resurgent India Bonds were issued in US dollar, Pound Sterling and


A). Japanese Yen
B). Deutsche Mark
C). Euro
D). French Franc
Answer : Option B

Question 9 :

The apex body for formulating plans and coordinating research work in agriculture and allied fields is


A). State Trading Corporation
B). Regional Rural Banks
C). National Bank for Agriculture and Rural Development (NABARD)
D). Indian Council of Agricultural Research
Answer : Option D

Question 10 :

Which of the following is not an undertaking under the administrative control of Ministry of Railways?


A). Container Corporation of India Limited
B). Konkan Railway Corporation Limited
C). Indian Railways Construction Company Limited
D). Diesel Locomotive Works, Varanasi
Answer : Option C

Question 11 :

If the RBI adopts an expansionist open market operations policy, this means that it will


A). buy securities from non-government holders
B). sell securities in the open market
C). offer commercial banks more credit in the open market
D). openly announce to the market that it intends to expand credit
Answer : Option C

Question 12 :

Redistribution polices geared to reduce economic inequalities include


A). progressive tax policies
B). land reforms
C). rural development policies
D). All the above
Answer : Option D

Question 13 :

Short-term finance is usually for a period ranging up to


A). 5 months
B). 10 months
C). 12 months
D). 15 months
Answer : Option C

Question 14 :

In India, which one among the following formulates the fiscal policy?


A). Planning Commission
B). Ministry of Finance
C). Finance Commission
D). The Reserve Bank of India
Answer : Option B

Question 15 :

The budget deficit means


A). the excess of total expenditure, including loans, net of lending over revenue receipts
B). difference between revenue receipts and revenue expenditure
C). difference between all receipts and all the expenditure
D). fiscal deficit less interest payments
Answer : Option C

Question 16 :

In utensils worth Rs 1000 are produced with copper worth Rs 500, wages paid are Rs 100, other material purchased is worth Rs 100 and depreciation of machinery is zero, then what is the value added in process?


A). Rs 1000
B). Rs 500
C). Rs 400
D). Rs 300
Answer : Option D

Question 17 :

Paper currency first started in India in


A). 1861
B). 1542
C). 1601
D). 1880
Answer : Option A

Question 18 :

Devaluation of currency leads to


A). fall in domestic prices
B). increase in domestic prices
C). no impact on domestic prices
D). erratic fluctuations in domestic prices
Answer : Option B

Question 19 :

Since 1983, the RBI's responsibility with respect to regional rural banks was transferred to


A). ARDC
B). SBI
C). NABARD
D). PACs
Answer : Option C

Question 20 :

Deficit financing implies


A). printing new currency notes
B). replacing new currency with worn out currency
C). public expenditure in excess of public revenue
D). public revenue in excess of public expenditure
Answer : Option C

Question 21 :

In which of the following sequences the change in quantity of money leads to change in price level in the Keynesian models?


A). Change in quantity of money - change in investment - change in employment and output - change in rate of interest - change in price level
B). Change in quantity of money - change in employment and output - change in investment - change in the rate of interest - change in price level
C). Change in quantity of money - change in investment - change in rate of interest - change in employment and output - change in price level
D). Change in quantity of money - change in rate of interest - change in investment - change in employment and output - change in price level
Answer : Option D

Question 22 :

Foreign Direct Investment ceilings in the telecom sector have been raised from 74 percent to


A). 80 percent
B). 83 percent
C). 90 percent
D). 100 percent
Answer : Option D

Question 23 :

Which of the following is not a part of machinery that settles industrial disputes?


A). Wage Court
B). Works Committee
C). Conciliation officers
D). Board of Conciliation
Answer : Option A