Economical Background - Current knowledge

ANSWERS ARE GIVEN IN BOLD

1.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

2.Gilt-edged market means

A. bullion market B. market of government securities C. market of guns D. market of pure metals

3. 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

4. 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

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

A. 4 B. 5 C. 6 D. 8

6. 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 7. 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 8. 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

 

 

	9. India changed over to the decimal system of coinage in
	A. April 1995 B. April 1957 C. April 1958 D. April 1959
	10. 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
11. 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
12. 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
	13. On July 12, 1982, the ARDC was merged into
	A. RBI B. NABARD C. EXIM Bank D. None of the above
	14. 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
	15. 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
	16. The central co-operative banks are in direct touch with
	A. farmers B. state co-operative banks C. land development banks D. central government
	17. The first wholly Indian Bank was set up in
	A. 1794 B. 1894 C. 1896 D. 1902
	18. States earn maximum revenue through
	A. land revenue B. custom revenue C. commercial taxes D. excise duties on intoxicants
19. Our financial system has provided for the transfer of resources from the centre to the states; the important means of resource transfer are
A. tax sharing B. grant-in-aids C. loans D. All the above
20. Debenture holders of a company are its
A. shareholders B. creditors C. debtors D. directors
21. Excise duty is a tax levied on the
A. import of goods B. export of goods C. production of goods D. sale of goods

Expln:
What is Excise Duty? Is it collected by the State Government or the Central Government? How is it different from Sales Tax?
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty and is collected in terms of Section 3 of the Central Excise Act, 1944.
Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods.

	22. In pursuance with the recommendations of Narsimhan Committee, the RBI has framed new guidelines
	A. to govern entry of new private sector banks to make the banking sector more competitive B. to reduce the freedom given to banks to rationalize their existing branch network C. to setup more foreign exchange banks D. to lend more easily for industrial development
23. Which of the following is the first Indian private company to sign an accord with Government of Myanmar for oil exploration in two offshore blocks in that country?
A. Reliance Energy B. Essar Oil C. GAIL D. ONGC
24. Non Tax revenues can be increased by improving the working of the
A. State Road Transport Corporations B. electricity boards C. commercial irrigation projects D. All of the above
25.Which of the following is not viewed as a national debt?
A. Provident Fund B. Life Insurance Policies C. National Saving Certificate D. Long-term Government Bonds

26. The condition of indirect taxes in the country's revenue is approximately

A. 70 percent B. 75 percent C. 80 percent D. 86 percent

	27. Deficit financing means that the government borrows money from the
	A. RBI B. local bodies C. big businessmen D. IMF

28. Revenue of the state governments are raised from the following sources, except

A. entertainment tax B. expenditure tax C. agricultural income tax D. land revenue