MCQs on Economics -33

1. Which of the following are correct with respect to new method of calculating GDP?
1. It is based on income method
2. Growth rate will now be measured by GDP at constant market prices
3. GDP = åGVA at basic price +product taxes – product subsidies
4. Stamp duty is an example of product tax
(a) 1, 3, 4
(b) 2, 3
(c) 2, 3, 4
(d) All the above


2. Consider the following statements:
1. Payment bank cannot issue credit cards
2. There is a limit on maximum balance of individual customer in payment bank
3. SLR requirements for payment banks and small banks is less than commercial banks
4. Priority sector lending up to 40% is mandatory for both private banks and small banks
(a) 1, 2, 4 correct
(b) 3, 4 correct
(c) 1, 2 correct
(d) 1, 3, 4 correct



3. Which of the following is not a public sector undertaking?
(a) Bharat Earth Movers Limited
(b) Educational Consultants India Limited
(c) Balmer Lawrie & Co Ltd
(d) None of the above


4. Consider the following statements:
1. Treaty shopping and round tripping are practiced by companies as part of tax planning
2. DTAA will help in attracting more investments
3. India has a DTAA with more than 80 countries
4. India has a negative list with respect to service tax from 2012
(a) 2, 3, 4 correct
(b) 1, 2, 3 correct
(c) 1, 3, 4 correct
(d) All the above



5. Consider the following statements:
1. Inflation targeting focuses on achieving price stability through monetary policy
2. WPI does consider various services for calculating inflation
3. The newly introduced CPI(Rural) and CPI (Urban) are announced by ministry of
Rural development
4. Inflation discourages exports
(a) 1, 2, 3 correct
(b) 1, 3, 4 correct
(c) 1, 2, 4 correct
(d) All the above



6. Arrange the following in the increasing order of their validity periods
1. Notice money
2. Call money
3. Treasury Bills
4. Dated securities
(a) 1→2→4→3
(b) 2→1→3→4
(c) 1→2→3→4
(d) 2→1→4→3



7. The growth rate of the Per Capita Income at the current price is higher than the Per Capita Income at constant prices, because the former takes into account the rate of
(a) Increase in price level
(b) Population growth
(c) Growth in money supply
(d) Increase in wage rate



8. Consider the following statements regarding Gold-Exchange Traded Funds (G-ETF)
1. G-ETF acts as a substitute for physical gold
2. G-ETF will reduce current account deficit
3. Security Transaction Tax is not levied on G-ETF
4. G-ETF can be traded on National
Spot exchange limited
(a) All are false
(b) Only 4 is false
(c) Only 3 is false
(d) All are true



9. Consider the following statements:
1. There is no Universal Banking practice in India
2. Universal Banking leads to loss in specialization
3. NBFCs are also called as Shadow banks
(a) 1, 2 correct
(b) 2, 3 correct
(c) 1, 3 correct
(d) All the above



10. Redistribution policies geared to reduce economic inequalities include
(a) Rural development schemes
(b) Land reforms
(c) Progressive tax policies
(d) All the above



11. Which of the following instruments used by private markets to raise capital abroad?
1. American Depository Receipts
2. Global Depository Receipts
3. Indian Depository Receipts
4. Euro issues
(a) 1, 2
(b) 1, 2, 4
(c) 1, 2, 3
(d) All the above


12. With reference to India, consider the following
1. Lead Bank scheme
2. No frill accounts
3. Differential Rate of Interest scheme
4. Teaser loans
Which of the above can be considered as steps taken to achieve “financial inclusion” in India?
(a) 1, 3, 4
(b) 2, 3, 4
(c) 3, 4
(d) All the above



13. Consider the following statements:
1. Secondary market is the financial market for trading of securities that have been issued in an IPO/FPO
2. Futures and options are two classes of derivatives
3. Repurchase of stock that has been issued is known as buyback of shares
(a) 1, 3 correct
(b) 2, 3 correct
(c) 1, 2 correct
(d) All the above



14. Consider the following statements:
1. Bullion is also traded as part of commodity futures in commodity exchanges
2. Commodity exchanges are regulated by forward markets commission
3. Currency futures trading is allowed in India
4. Currency futures are traded
in commodity exchanges
(a) 1, 2, 4 correct
(b) 1, 2, 3 correct
(c) 2, 3, 4 correct
(d) 1, 2, 3, 4 correct




15. The RBI is bound to maintain a reserve against the issue whatever may be the amount. The system is called as
(a) Proportional Reserve System
(b) Gold Deposit Reserve system
(c) Minimum Reserve system
(d) Simple Deposit system

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