1. 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 the future.
2. In India, teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.
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
2. In the context of the Indian economy, consider the following statements:
1. The growth rate of GDP has steadily increased in the last five years.
2. The growth rate in per capita income has steadily increased in the last five years. 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
3. In India, which of the following has the highest share in the disbursement of credit to agriculture and allied activities?
a) Commercial Banks
b) Cooperative Banks
c) Regional Rural Banks
d) Microfinance Institutions
4. Which of the following can aid in furthering the Government’s objective of inclusive growth?
1. Promoting Self-Help Groups
2. Promoting Micro, Small, and Medium Enterprises.
3. Implementing the Right to Education Act
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
5. Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?
1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.
2. The Government no longer intends to retain the management control of the CPSEs.
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
6. Economic growth is usually coupled with
a) Deflation
b) Inflation
c) Stagflation
d) Hyperinflation
7. The lowering of Bank Rate by the Reserve Bank of India leads to
a) More liquidity in the market
b) Less liquidity in the market
c) No change in the liquidity in the market
d) Mobilization of more deposits by commercial banks
8. India has experienced persistent and high food inflation in the recent past. What could be the reasons?
1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%.
2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.
3. The food supply chain has structural constraints. Which of the statements given above are correct?
a) 1 and 2 only
b) 2 and 3 only
c) 1 and 3 only
d) 1, 2 and 3
9. In terms of economy, the visit by foreign nationals to witness the XIX Common Wealth Games in India amounted to
a) Export
b) Import
c) Production
d) Consumption
10. Which one of the following statements appropriately describes the “fiscal stimulus”?
a) It is a massive investment by the Government in the manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth
b) It is an intense affirmative action of the Government to boost economic activity in the country
c) It is the Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation
d) It is an extreme affirmative action by the Government to pursue its policy of financial inclusion
11. Consider the following actions which the government can take:
1. Devaluing the domestic currency.
2. Reduction in the export subsidy.
3. Adopting suitable policies that 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
12. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is the “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 the previous year on the calculation of the inflation rate
d) None of the statements (a), (b), and (c) given above is correct in this context
13. India is regarded as a country with a “Demographic Dividend”. This is due to
a) Its high population in the age group below 15 years
b) Its high population in the group of 15-64 years
c) Its high population in the age group above 65 years
d) Its high total population
14. With what purpose is the Government of India promoting the concept of “Mega Food Parks”?
1. To provide good infrastructure facilities for the food processing industry.
2. To increase the processing of perishable items and reduce wastage.
3. To provide emerging and eco-friendly food processing technologies to entrepreneurs.
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
15. Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under micro-finance is/are:
1. Credit facilities
2. Savings facilities
3. Insurance facilities
4. Fund Transfer facilities
Select the correct answer using the codes given below the lists:
a) 1 only
b) 1 and 4 only
c) 2 and 3 only
d) 1, 2,3 and 4
16. 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 grants loans to only member countries
d) It can grant loans to the central bank of a country
17. Which one of the following is not a feature of “Value Added Tax”?
a) It is a multi-point destination-based system of taxation
b) It is a tax levied on value addition at each stage of transaction in the production- distribution chain
c) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
d) It is basically the subject of the Central Government and the State Governments are
only a facilitator for its successful implementation
18. 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 place
19. 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
Answer:
1; A; 2-B; 3-A; 4-D; 5-D;
6-B; 7-A; 8-B; 9-A;10-B;
11-A; 12-C; 13-B; 14-D;
15-D; 16-C; 17-D; 18-D; 19-B;
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