Economics and Indian Economy Test

1.   When the productive capacity of the economic system of a State is inadequate to create sufficient number of jobs, it is called

1. Seasonal unemployment
2. Structural unemployment
3. Disguised unemployment
4. Cyclical unemployment

2. Fiscal policy in India is formulated by

1. The Reserve Bank of India
2. The Planning Commission
3. The Finance Ministry
4. The Securities and Exchange board of India

3. Which one among the following is not a clause of World Trade Organization?

1. Most favoured nation treatment
2. Lowering trade barriers with negotiations
3. Providing financial support to the countries having deficit balance of payments
4. Discouraging unfair trade practices such as anti-dumping and export subsides

4. Special Drawings Rights (SDRs) relate to

1. The World Bank
2. The Reserve Bank of India
3. The World Trade Organization
4. The International Monetary Fund

5. Which of the following measures should be taken when an economy is going through inflationary pressures?

1. The direct taxes should increased.
2. The interest rate should be reduced.
3. The public spending should be increased.

Select the correct answer using the code given below:

Code:

1. 1 only
2. 2 only
3. 2 and 3
4. 1 and 2

6. National income ignores

1. Sales of a firm
2. Salary of employees
3. Exports of the IT sector
4. Sale of land

7. The TEAM-9 initiative is a techno economic cooperation venture between India and eight countries of

1. West Africa
2. East Africa
3. North Africa
4. Central Africa

8. Which one among the following is not true for Special Economic Zones?

1. No licence is required for import
2. Manufacturing and service activities are allowed
3. No permission for subcontracting
4. No routine examination of cargo for export/import by customs authorities

9. According to Goldman Sachs’ review of emerging economies, by 2050 which one of the following would be the order of the largest economies in the world?

1. China-USA-India-Brazil-Mexico
2. USA-China-India-Brazil-Mexico
3. China-USA-Brazil-India-Mexico
4. USA-Mexico-China-India-Brazil

10. Who estimated the National Income for the first time in India?

1. Mahalanobis
2. Dadabhai Naoroji
3. VKRV Rao
4. Sardar Patel

11. Economic development depends on

1. Natural resources
2. Capital formation
3. Size of the market
4. All of the above

12. National income is generated from

1. any money making activity
2. any laborious activity
3. any profit-making activity
4. any productive activity

13. Money supply is governed by the

1. Planning Commission
2. Finance Commission
3. Reserve Bank of India
4. Commercial Banks

14. The present Indian monetary system is based on

1. Gold Reserve System
2. Proportional Reserve System
3. Convertible Currency System
4. Minimum Reserve System

15. A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as

1. Absolute Poverty
2. Relative Poverty
3. Urban Poverty
4. Rural Poverty

16. Full convertibility of a rupee means

1. Purchase of foreign exchange for rupees freely
2. Payment for imports in terms of rupees
3. Repayment of loans in terms of rupees
4. Determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

17. India is called a mixed economy because of the existence of

1. Public Sector
2. Private Sector
3. Joint Sector
4. Cooperative Sector

1. 1, 4
2. 1, 2
3. 3, 4
4. 2, 4

18. The term stagflation refers to a situation where

1. Growth has no relation with the change in prices
2. Rate of growth and prices both are decreasing
3. Rate of growth is faster than the rate of price increase
4. Rate of growth is slower than the rate of price increase

19. Revealed Preference Theory was propounded by

1. Adam Smith
2. Marshall
3. P. A. Samuelson
4. J. S. Mill

20. Gross Domestic Product is defined as the value of all

1. Goods produced in an economy in a year
2. Goods and services produced in an economy in a year
3. Final goods produced in an economy in a year
4. Final goods and services produced in an economy in a year

21. An exceptional demand curve is one that moves

1. Upward to the right
2. Downward to the right
3. Horizontally
4. Vertically

22. Production function explains the relationship between

1. Initial inputs and ultimate output
2. Inputs and ultimate consumption
3. Output and consumption
4. Output and exports

23. The Draft of the Five Year Plans in India is approved by the

1. National Development Council
2. Planning Commission
3. National Productivity Council
4. Ministry of Finance

24. In Economics the terms ‘Utility’ and ‘Usefulness’ have

1. Same meaning
2. Different meaning
3. Opposite meaning
4. None of the above

25. Nature of unemployment in agriculture in India is

1. Only seasonal
2. Only disguised
3. Both (a) and (b)
4. None of the above

26. The terms "Micro Economics" and "Macro Economics" were coined by

1. Alfred Marshall
2. Ragner Nurkse
3. Ragner Frisch
4. J.M. Keynes

 Macro Economics (New)

27. As a result of the Great Depression of 1929, the unemployment rate in USA rose from 3 percent to 25 percent. Unemployment rate is defined as:
a) Ratio of number of people who are not working and looking for jobs to the total population of the country
b) Ratio of number of people who are working to the number of people who are not working and looking for jobs
c) Ratio of number of people who are not working and looking for jobs to the number of people who are working
d) Ratio of the total population of the country to the number of people who are not working

28. Which of the following is/are characteristics of capitalist economy?
1. Private and Public ownership of means of production
2. Production takes place for selling the output in the market
3. There is a sale and purchase of labour services at a price called wage rate
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3

29. Which among the following is/are an example of investment expenditure?
1. Part of the revenue paid out as rent for the services rendered by land
2. Part of the revenue paid to capital as interest
3. Part of the revenue paid to labourers as wages
4. Part of revenue used to buy new machinery or to build new factories to expand production
Code:
a) 1, 2 and 4 only
b) 3 and 4 only
c) 4 only
d) 1, 2 and 3 only

30. Consider the following statements:
1. Consumption goods or consumer goods does not include services
2. Capital goods are those, that are of durable character and are used in the production processes
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

31. National Income in India measured in terms of
a) Gross National Product
b) Gross Domestic Product
c) Net National Product at Market Price
d) Net National Product at Factor Cost

32. Net National Product at factor cost is calculated by
a) GNP – Depreciation
b) NNP at market price – Indirect taxes
c) NNP at market price – Indirect taxes + Subsidies
d) GNP + Net factor Income from abroad

 

33. Which of the following is/are not included in the Personal Disposable Income (PI) earned by the households?
1. Undistributed profits
2. Corporate tax
3. Transfer payments by the governments
4. Income Tax
Code:
a) 1, 2 and 4 only
b) 1 and 2 only
c) 2, 3 and 4 only
d) 1, 2, 3 and 4

34. Consider the following statements about real GDP:
1. It is calculated in such a way that the goods and services are evaluated at some constant set of prices
2. It is calculated in such a way that the goods and services are evaluated at current prices
3. An increase in the value of real GDP indicates an increase in the volume of production
4. An increase in the value of real GDP indicates an increase in the prices of goods and services
Which of the statements given above is/are correct?
a) 1 and 3 only
b) 2 and 4 only
c) 1 only
d) 2 only

35. Which of the following statement is NOT correct about Consumer Price Index (CPI)?
a) This is the index of prices of a given basket of commodities bought by the representative consumer
b) This is the index of prices of all the goods and services produced in the country
c) It is calculated in percentage terms
d) It is expressed as the percentage of the prices of commodities in the current year to the prices of commodities in the base year

 

36. GDP of a country is:
a) Sum total of value of goods and services created within the geographical boundary of a country in a particular year
b) Sum total of value of goods and services created by the nationals of a country within the geographical boundary of a country in a particular year
c) Sum total of value of goods and services created by the nationals of a country within or outside the country in a particular year
d) Sum total of value of goods only created within the geographical boundary of country in a particular year

 

37. GDP of a country cannot be taken as an index of the Welfare of the people of a country. Why?
1. Rise in the GDP may be concentrated in the hands of very few individuals or firms
2. Many activities in an economy are not evaluated in monetary terms
3. Other externalities which refers to the benefits or harms a firm or an individual causes to another for which they are not paid or penalised
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 3 only
d) 1, 2 and 3

 

38. Which of the following is/are the functions of Money?
1. It acts as a medium of exchange.
2. It acts as a convenient unit of account.
3. It acts as a store of value for individuals.
Code:
a) 1 only
b) 1 and 3 only
c) 1 and 2 only
d) 1, 2 and 3

39. Consider the following statements about bonds:
1. These are papers bearing the promise of a future stream of monetary returns over a certain period of time.
2. Bond papers are issued by Government only
3. These are tradable in the market.
Which of the statements given above is/are correct?
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3

40. If the supply of money in the economy increases and people purchase bonds with this extra money, what will happen?
1. The bond prices will rise
2. Rate of interest will decline
Code:
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

41. Which of the following statement given below is correct?
a) In India, currency notes and coins are issued by the Reserve Bank of India.
b) Currency notes are issued by Government of India while coins are issued by RBI.
c) Currency notes and coins are issued by Government of India.
d) Currency notes are issued by Reserve Bank of India, while coins are issued by Government of India.

42. Consider the following statements given below:
1. Currency notes and coins do not have intrinsic value like a gold or silver coin.
2. Currency notes and coins are called legal tenders as they cannot be refused by any citizen of the country for settlement of any kind of transaction.
3. Similar to currency notes and coins, cheques drawn on savings or current accounts can never be refused by anyone as a mode of payment.
Which of the statements given above is/are not correct?
a) 1 and 3 only
b) 3 only
c) 1 and 2 only
d) None of the above

43. RBI publishes figures of four alternative measures of money supply, viz. M1, M2, M3 and M4.
M3 is the most commonly used measure of money supply. It consists of:
a) Money held by the public and net demand deposits held by commercial banks.
b) Money held by the public and net demand as well as time deposits held by the commercial banks.
c) Money held by public + Net demand deposits with banks + Savings deposits with Post office
d) Money held by Public + Net time and term deposits with commercial banks + Total deposits with Post Office Savings Organisation.

 

44. Consider the following statements:
1. The Currency Deposit Ratio is the proportion of the total deposits commercial banks keep as reserves.
2. The Reserve Deposit Ratio is the money held by the public in currency to that they hold in bank deposits.
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

45. RBI uses various policy instruments to bring forth a healthy Reserve Deposit Ratio in commercial banks. Consider the following statements in this regard.
1. Cash Reserve Ratio is the fraction of their deposits that banks must keep with RBI.
2. Statutory Liquidity Ratio (SLR) requires the banks to maintain a given fraction of their demand deposits in the form of specified liquid assets.
Which of the statement given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

46. Consider the following statements about Bank Rate and choose the correct ones.
1. The rate at which commercial banks borrow money from RBI when they run short of reserves is called Bank Rate.
2. The rate at which interest is given to the commercial banks on the money they deposit with RBI is called Bank Rate.
3. A high bank rate encourages the commercial banks to maintain a Healthy Reserve Deposit Ratio.
Code:
a) 1 only
b) 1 and 3 only
c) 2 and 3 only
d) 2 only

 

47. Consider the following statements about the activities of the Commercial Banks and choose the correct ones:
1. The rate of interest offered by the bank to deposit holders is called lending rate
2. The rate at which investors borrow money from commercial banks is called borrowing rate
3. The difference between the above two rates is called ‘spread’, which is the profit appropriated by banks
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 3 only
d) 1, 2 and 3

48. The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money. It consists of:
1. Currency notes and coins in circulation with the public
2. Vault cash of commercial banks
3. Deposits held by Government of India and Commercial banks with RBI
Code:
a) 1 only
b) 1 and 2 only
c) 2 and 3 only
d) 1, 2 and 3

49. Consider the following statements:
1. RBI is known as the lender of last resort
2. RBI acts as a banker to the commercial banks, Government of India and also to the State Governments
3. Financing of budget deficits by the governments through Central Bank Borrowing is called Deficit Financing
Which of the statements given above is/are correct?
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3

50. Open Market Operations (OMO) are done by RBI to:
1. Increase or decrease the money supply in the economy
2. Raise money for the Government from the market
3. To rein in the depreciation in the value of domestic currency
Code:
a) 1 only
b) 1 and 2 only
c) 2 and 3 only
d) 1, 2 and 3

51. The government affects the personal disposable income of households by making transfer payments and collecting taxes and therefore, can alter the income distribution. This function of government is termed as:
a) Allocation function
b) Stabilisation
c) Distribution function
d) Sterilisation

52. Which of the following taxes appropriated by Government of India are termed as ‘Paper taxes’?
1. Wealth tax
2. Gift tax
3. Corporate tax
4. Custom duty
5. Excise duty
Code:
a) 1, 3 and 5 only
b) 1 and 2 only
c) 2 only
d) 1, 2, 4 and 5 only

53. Which of the following is/are included in the non-tax revenue of the central government.
1. Dividends
2. Profits on investment made by the government
3. Fees and other receipts for services rendered by the government
4. Cash grants-in-aid from foreign countries and international organisations
Code:
a) 1 only
b) 1, 2 and 3 only
c) 2, 3 and 4 only
d) 1, 2, 3 and 4

 

54. Consider the following statement about the Revenue Expenditure and choose the correct ones:
1. It is the expenditure incurred for purposes of creation of physical or financial assets of the Central Government
2. It includes the expenses incurred for the normal functioning of the government departments and various services, interest payments and grants given to state governments and other parties
Code:
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2

55. Service Tax in India was introduced in the year
a) 1994-95
b) 1995-96
c) 1998-99
d) 1999-2000

 

56. Budget documents classify total expenditure into plan and non-plan expenditure. Which of the following come under non-plan expenditure?
1. Interest payments
2. Defence services
3. Subsidies
4. Salaries and pensions
Code:
a) 1, 3 and 4 only
b) 1 and 3 only
c) 1, 2 and 3 only
d) 1, 2, 3 and 4

57. Consider the following statements and choose the correct ones:
1. All those receipts of the government which result in creation of physical or financial assets or reduction in financial liabilities are called Capital Receipts
2. Those expenditures of the government which create liability or reduce financial assets are termed as Capital Expenditure
3. Capital expenditure is also categorised as plan and non-plan in the budget documents
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 3 only
d) 1, 2 and 3

58. When a government spends more than it collects by way of revenue, it incurs a budget deficit. Consider the following statements in this regard:
1. Fiscal deficit is the difference between the government’s total expenditure and its total receipts including borrowing
2. The revenue deficit includes only such transactions that affect the current income and expenditure of the government
3. Primary deficit is calculated by reducing Net interest liabilities from Gross fiscal deficit

Which of the statement given above is/are correct?
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3

59. Which of the following were the main features of FRBM Act, 2003
1. To reduce the fiscal deficit to not more than 3 percent of GDP
2. To reduce the revenue deficit to zero by March 2009
3. It required the reduction in fiscal deficit by 0.3 percent of GDP each year and the revenue deficit by 0.5 per cent
Code:
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) 1, 2 and 3

60. Consider the following statements and choose the correct ones:
1. The balance of payments (BoP) record the transactions in goods, services and assets between residents of a country with the rest of the world in a year
2. The current account records the import and exports of goods only
3. Trade in services is denoted as invisible trade
Code:
a) 1 only
b) 1 and 2 only
c) 1 and 3 only
d) 1, 2 and 3

61. Consider the following statements:
1. Nominal Effective Exchange Rate (NEER) is a multilateral rate representing the price of a representative basket of foreign currencies, each weighted by its importance to the domestic country in international trade
2. Nominal Exchange rate is often taken as a measure of a country’s international competitiveness
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

Indian Economic Development (New syllabus)

62. In 1991 India met with an economic crisis. Which of the following can be quoted as a reason for the same?
1. The high level of external debt.
2. High level of foreign exchange reserve.
3. Rising prices of essential goods.
4. Import substitution policy of India.
5. Political instability.
Code:
a) 1 and 2
b) Only 1
c) 2, 3 and 4
d) All the above

63. Consider the following statements about India’s approach in dealing with 1991 crisis.
1. India approached the international bank for reconstruction and development popularly known as IMF for loan to manage the crisis.
2. India came up with new economic policies which were based on the conditionality of international institutions.
3. Conditionality of international institutions was not as a punishment but were towards creating more competitive environment in the economy.
Select the correct ones.
a) All the above
b) 2 and 3
c) 1 and 2
d) 1 and 3

64. Which of the following is not a part of changes in industrial sector post 1991 reform?
1. Industrial licensing under which every entrepreneur had to get permission from government officials to start a firm was abolished except in some sector.
2. Private sector was allowed in many industries.
3. Some goods could be produced only in small scale industries.
4. Controls on price fixation and distribution of selected industrial products.
Code:
a) 1, 3 and 4
b) 1, 2, 3 and 4
c) 1 and 4
d) 3 and 4

65. There are many ways to categorize poverty. Consider the following statements in this regard.
1. ‘The people who are always poor’ and those whose are usually poor but who may sometimes have a little more money are called chronic poor.
2. The people who regularly move in and out of poverty are called churning poor.
3. People who are rich most of the time but may sometimes have a patch of bad luck are called occasionally poor.
Select the correct ones.
a) 1 and 2
b) 2 and 3
c) All the above
d) 1 and 3

66. Most of the economies including India are mixed economies. Consider the following statements.
1. In mixed economies government and the market together answer what and how to produce and how to distribute what to produce.
2. The government will provide whatever goods and services it can produce well.
3. The market will produce to the goods and services the government fails to do.
Select the correct ones.
a) Only 1
b) 1 and 3
c) All the above
d) 2 and 3

67. India followed a planned economy from the time of independence. Consider the following statements.
1. India‘s plans were of five years and lacked a perspective approach.
2. Directive principles of Indian constitution reflect the planned outlook of India.
3. Our five year plans do not spell out how much of each and every good and service is to be produced.
Select the correct statements using codes below.
a) Only 2
b) 2 and 3
c) 1 and 3
d) All the above

68. In case of India we have unemployment in rural and urban areas. Consider the following statements about types of unemployment in India.
1. Disguised unemployment happens when people are not able to find jobs during some months of the year due to agricultural patterns.
2. Educated unemployment is a result of improper management of Human resources.
3. In case of India, statistically, the unemployment rate is low.
Select the correct statements using codes below.
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) All of the above
69. Poverty has many facets and is looked through various social Indicators. Consider the following statements in this regard:
1. Social Exclusion describes the greater probability of being more adversely affected than other people.
2. Vulnerability is a process through which individuals or groups are not able to access facilities, benefits and opportunities that others enjoy.

Which of the statements given above is/are correct?
a) Only 1
b) Only 2
c) Both 1 and 2

70. Although there has been a substantial reduction in global poverty, it is marked with great regional differences. Consider the following statements related to this.
1. In Sub-Saharan Africa, poverty in fact rose from 41 per cent in 1981 to 46 per cent in 2001.
2. Number of poors in South Asia has come down from 606 million in 1981 to 212 million in 2001.
3. Poverty has also resurfaced in some of the former socialist countries like Russia after their opening up.
Select the correct statements using codes given below.
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) All of the above

71. Economy of a country is classified into various sectors based on different types of economic activity undertaken in each. Consider the following statements related to some of them.
1. All Agricultural activities are included in Primary sector
2. All Industrial activities are included in secondary sector.
3. Service sector includes only those activities that help in production of goods.
Select the incorrect statements using codes given below.
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) All of the above

72. Human Development Report published by UNDP compares countries based on the educational levels of the people, their health status and per capita income. Consider the following statements related to this.
1. In HDR Per Capita Income is calculated in dollars adjusted by purchasing power for all countries so that it can be compared.
2. Nepal has half the per capita income of India, yet it is not far behind India in life expectancy and literacy levels.
3. Health, education and skill indicators are used along with income as a measure of development in HDI.
Select the correct statements using codes below.
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) All of the above

73. India is a planned ‘socialist’ society with a strong public sector but also with private property and democracy. What were the goals of five year plans in the years after India’s Independence?
1. Growth
2. Modernisation
3. Self Reliance
4. Nationalisation
5. Equity
Code:
a) 1, 3 and 5
b) 2, 3 and 5
c) 1, 2, 3 and 5
d) All of the above

74. The economic justification of subsidies in agriculture is, at present, a hotly debated question. Consider the following statements related to this.
1. A substantial amount of fertiliser subsidy also benefits the fertiliser industry, not only farmers.
2. The subsidy largely benefits the farmers in the more prosperous regions.
3. Most farmers in India are very poor and they will not be able to afford the required inputs without subsidies.
Select the correct statements using codes below.
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) All of the above

 

75. Liberalisation was introduced to put an end to restrictions and open up various sectors of the economy. Which of the following liberalisation measures were taken up before 1990s?
1. Industrial licensing
2. Export-import policy
3. Tax reforms
4. Foreign investment
5. Technology upgradation,
Code:
a) 1 and 3 only
b) 2 and 5 only
c) 1, 2 and 5 only
d) All of the above

76. The financial sector in India is primarily controlled by the Reserve Bank of India (RBI). Which of the following institutions are a part of financial sector?
1. Commercial banks
2. Money Lenders
3. Investment banks
4. Stock exchange operations
5. Insurance
6. Foreign exchange market
Code:
a) 1, 2, 3 and 6
b) 1, 3, 4, 5 and 6
c) 1, 3, 4 and 6
d) All of the above

77. Infrastructure provides supporting services in the main areas of industrial and agricultural production, domestic and foreign trade and commerce. Consider the following statements about infrastructure.
1. Infrastructure associated with energy, transportation, housing and communication are included in the economic Infrastructure.
2. Agriculture does not depend on infrastructure as it is labour intensive.
3. Infrastructure contributes to economic development of a country by improving the quality of life of its people.
Which of the statements given above is/are not correct?
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) All of the above

 

78. Over the years, India has built up a vast health infrastructure and manpower at different levels. Consider the following statements related to Health infrastructure in India.
1. More than 70 per cent of the hospitals in India are run by the private sector.
2. Nearly 60 per cent of dispensaries are run by the public sector.
3. More than 80 per cent of the medical service providers in private sector are single person owned
Select the correct statements using the codes given below.
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) All of the above

79. An important form in which people hold money is deposits with banks. Consider the following statements related to this.
1. Since the deposits in the bank accounts can be withdrawn anytime, these deposits are called fixed deposits.
2. Banks mediate between those who have surplus funds and those who are in need of these funds.
3. Credit refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Select the correct statements using the code below.
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) All of the above

80. The terms of credit vary substantially from one credit arrangement to another. Consider the following statements related to various credit arrangements.
1. Loans from Money lenders, traders and cooperatives are informal loans.
2. Informal sector is largest credit lender outperforming commercial banks.
3. The Reserve Bank of India supervises the functioning of formal sources of loans.
Select the correct statements using the codes given below.
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) All of the above

81. Cheap and affordable credit is crucial for the country’s development. Consider the following statements related to credit availability in India.
1. Rich households in urban area has more accessibility to formal credit in India.
2. The cost to the borrower of informal loans is much higher than formal loans.
3. The formal sector still meets only about half of the total credit needs of the rural people.
Select the correct statements using the code below.
a) 1 and 2 only
b) 1 and 3 only
c) 2 and 3 only
d) All of the above

82. The health status of a country can be assessed through indicators such as infant mortality rate, maternal mortality rates, life expectancy and nutritional levels along with incidence of communicable and non-communicable diseases. Consider the following about indicators of health in comparison with other countries?
1. The expenditure of India to Health as percentage of GDP is slightly better than Sri Lanka and China
2. Infant mortality rate in India is higher than China, Sri Lanka and US
3. India stands far ahead than China in giving birth by skilled attendants
Select the correct statements using codes given below:
a) 1 and 2
b) 2 and 3 only
c) 2 only
d) 1, 2 and 3

83. NABARD is the apex institution in the country which looks after the development of the cottage industry, small industry, village industry, and other rural industries. NABARD also reaches out to allied economies and supports and promotes integrated development. Consider the following about the functions of NABARD
1. Co-ordinate the activities of all institutions involved in rural financing system
2. Refinance
3. Accepting deposits from public
Select the correct answer from the code given below:
a) 1 and 3
b) 1 and 2
c) 1, 2 and 3
d) 3 only

84. Currency is accepted as medium of exchange because the currency is authorized by the government of the country? Consider the statements about issue of currency.
1. In India, the Reserve Bank of India and an institution recommended by Parliament can issue currency notes on behalf of the central government.
2. In India, the law legalizes the use of rupee as a medium of payment that cannot be refused in settling transaction in India.
3. Some Indians can legally refuse a payment made in rupees
Select the correct answer from the code given below.
a) 1 only
b) 1 and 2
c) 2 and 3
d) 2 only

85. In accordance with the goal of the state controlling the commanding heights of the economy, the industrial policy resolution of 1956 was adopted consider the following statements about 1956- industrial policy resolution?
1. This resolution formed the basis of the second five year plan, the plan which tried to build the basis for a capitalist pattern of society.
2. This policy was used for promoting industries in backward regions.
3. License to expand production achieved easily.
Select the correct answer from the code given below:
a) 1 and 2 b) 2 only
c) 2 and 3 d) 1 and 3

86. Activities which contribute to the gross national product are called economic activities. Consider the following statements about activities which contribute to GNP?
1. Income of Ambassadors of other countries in India
2. Women working at home also contribute to gross national product.
3. Income of people working abroad also contributes to gross national product.
Select the correct answer from the code given below:
a) 1 and 2
b) 2 and 3
c) 3 only
d) None

87. One of India’s competitive advantages is its demographic dividend. Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy. To obtain full benefits of demographic dividend what should our country do?
a) Introducing social security schemes.
b) Promoting skill development.
c) Reducing maternal mortality rate.
d) Privatization of higher education.

 

88. Gross national product can be defined as.
a) Total value of goods and services produced in the country.
b) Total value of all transaction in the country.
c) Depreciation in the total value of goods and services produced in the country.
d) Total value of goods and services produced in the country and net factor income from abroad.

 

89. Participation of women in workforce is crucial for economic development. Consider the following statements regarding participation of women?
1. Women work force was more in urban areas compared to rural areas.
2. Women workers account for one-third of the rural work force.
Select the correct answer from the code given below:
a) 1 and 2
b) 1 only
c) 2 only
d) None

90. There is a deterioration in the child sex ratio in the country. What are the possible reasons for it?
1. Low fertility rate
2. Female foeticide
3. Incentives for boy child from government
Select the correct answer from the code given below:
a) 1 and 2
b) 2 only
c) 1 only
d) All the above

91. In India, which of the following is having highest share in the disbursement of credit to agriculture and allied activities?
a) Cooperative Banks
b) Regional Rural Banks
c) Commercial Banks
d) Microfinance institutions

92. Buffer stock is created by the government to cater the future need. Considers the following statements about buffer stock?
1. Buffer stock is created to increase the income of the government at the time of crisis.
2. Price stability
3. This is done to distribute food grains in the deficit areas and among the poorer strata of society.
4. Buffer stock helps to resolve the problem of shortage of food during adverse weather conditions or during the periods of calamity.
Select the correct answer from the code given below:
a) 1, 2 and 3
b) 2, 3 and 4
c) 2 and 3
d) 1, 3 and 4

 

93. The consumption of Chemical fertilizers was an important factor in the success of Green Revolution in the late 1960’s. Consider the following statements.
1. Chemical fertilizers dissolve in water and are immediately available to plants.
2. Chemical fertilizers can kill bacteria and other micro-organisms in soil.
3. The use of Chemical fertilizers caused the rise in cost of production in the long term.
Select the correct ones.
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) All are correct

94. In case of India, we have unemployment in rural as well as urban areas. Consider the following statements in this regard.
1. Sometimes, the people will remain unemployed even in the peak of farming seasons, and is called the seasonal unemployment.
2. In case of disguised unemployment, people appear to be unemployed, and is a pseudo unemployment.
3. Educated unemployment is a common phenomenon in urban areas owing to the high levels of education.
Select the incorrect ones.
a) Only 3
b) 1 and 2
c) Only 1
d) 2 and 3

95. In case of India, statistically, the unemployment rate is low. Consider the following statements about unemployment.
1. The unemployment ratio is calculated only from the working age population, who are in the age group of 15 years to 59 years.
2. Unemployment is said to exist, when any of the persons in the workforce population cannot find jobs.
3. The main reason for the unemployment is the people who are not interested in working outside the domestic domain.
Select the incorrect ones
a) Only 3
b) 2 and 3
c) Only 2
d) All of these

96. The poverty line is revised periodically taking into consideration the rise in prices. Consider the following statements.
1. The poverty line is estimated periodically by conducting sample surveys normally every five years.
2. The surveys are carried out by the National Sample Survey Organisation.
3. For making comparisons between developing countries, the international organizations like World Bank use uniform standards.
Select the correct ones.
a) Only 2
b) All the above
c) Only 1
d) 1 and 2

97. Buffer stock is the stock of foodgrains procured by the government through Food Corporation of India (FCI). Consider the following statements in relation to the FCI procurements.
1. The FCI purchases wheat and rice from the states where there is a surplus.
2. Minimum support price is the price announced by the FCI before the sowing season.
3. Issue price is the price issued by the FCI for their procurements based on the market price.
Select the correct ones.
a) 1 and 2
b) Only 2
c) Only 1
d) All the above

98. Occupational structure of India in colonial period was completely different from the present systems. Consider the following statements.
1. There were hardly any service sectors in the colonial period.
2. The regional variations were not visible in the colonial era.
3. Agricultural sector accounted for the largest share of work force.
Select the incorrect ones.
a) Only 3
b) Only 1
c) All of these
d) 1 and 2

99. One of the main task post independence was to decide on the type of economic system most suitable for India. Consider the following statements.
1. Jawaharlal Nehru was in favour of the socialism as established in the former Soviet Union.
2. India moved with the mixed economy mainly due to the opposition from other leader.
3. With mixed economy India sought an alternative to the capitalism and socialism concepts.
Select the incorrect ones.
a) 1 and 2
b) Only 3
c) All of these
d) Only 2

100. Marketed Surplus was the most important fruit of Green Revolution period. Consider the following statements.
1. The portion of the agricultural produce which is sold in the market by the farmers is called the marketed surplus.
2. With the increase in supply, the price of food grains also increased relative to the other items of consumption.
3. The increase in food prices caused worsening the conditions of the low income groups.
Select the incorrect ones.
a) Only 1
b) None of these
c) 2 and 3
d) Only 2

101. An important approach to addressing poverty is to provide minimum basic amenities to the people. Consider the following statements about schemes to provide basic amenities.
1. National Social Assistance Programme is a programme to give pension to elderly people who do not have anyone to take care of them.
2. Pradhan Mantri Gramodaya Yojana aims to provide better connectivity in the villages by improving roads.
Select the correct statements using codes below.
a) 1 only
b) 2 only
c) Both 1 and 2
d) None of the above

 

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