MCQs on Economics -35

1. World Investment Report is published by which of the following?
(a) WEF
(b) WTO
(c) GATT

2. Duty Drawback Scheme is a normal export incentive given by all the economies and is allowed by the World Trade Organisation too. What is the rationale behind it?
(a) As different economies specialise in different products, this equalizes their differential effects on the world trade.
(b) Indirect taxes of the economies should not be allowed to get exported.
(c) As exporters earn precious foreign exchange for their economies.
(d) This is a declared bias in the provisions of the WTO and was among the reasons why the Doha Round of its talk stuck.

3. Which one of the following statements related to 'Sovereign Wealth Fund' is
(a) This proposed fund would help Indians facing adverse conditions in an alien country.
(b) This fund would help Indian lobbyists abroad to seek India's political and economic interests in their respective countries.
(c) This additional fund would be granted to the Indian forces to meet any exigencies arising out of intrusion in the Indian Territory.
(d) This fund would help India's state run companies pursue acquisition
of oil, gas, coal, LNG and other raw material in other countries.

4. The natural rate of unemployment is the sum of?
(a) Frictional unemployment and Structural unemployment
(b) Frictional unemployment and Cyclical unemployment
(c) Structural unemployment and Cyclical unemployment
(d) Structural unemployment and Seasonal unemployment

5. The Laffer curve shows the relationship between?
(a) Per capita income and environmental pollution
(b) Rate of unemployment and rate of inflation
(c) Tax rate and tax revenue
(d) Economic growth and income inequality

6. Big-mac index is based on?
(a) Official exchange rate
(b) Real effective exchange rate
(c) Nominal effective exchange rate The Right Choice of Achievers. P a g e | 13
(d) Purchasing power parity exchange rate

7. Which of the following regarding Financial stability and development council is/are true?
1. Headed by Finance Minister
2. A high-level body set up to strengthen and institutionalize the mechanism for maintaining financial stability, financial sector development.
3. Takes care of inter-regulatory coordination i.e., co-ordination among IRDA, SEBI & PFRDA
(a) 1, 3
(b) 2, 3
(c) 1, 2
(d) All the above

8. Which of the following regarding WTO is/are true?
1. Supports Regional Trade Agreements
2. The decisions of Dispute settlement body are legally binding
3. NAMA11 is a group of developing countries fighting againstdeveloped countries
(a) 1, 2
(b) 1, 3
(c) 2, 3
(d) All the above

9. Which of the following is not a reason for cost push inflation?
(a) The existence of a large parallel economy
(b) Excessive indirect taxation
(c) Fluctuations in agricultural and industrial output
(d) Increase in salaries to employees

10. Which of the following is/are correct regarding banking in India?
1. Capital Adequacy Ratio is determined by RBI
2. RBI determines the savings rate of Interest
3. RBI imposes fine at bank rate on banks if they do not maintain reserve requirements as specified by RBI
(a) Only 1
(b) Only 2
(c) Only 3
(d) 2, 3

11. Which of the following is/are correct?
1. Dedicated freight corridor corporation of India limited is a special purpose vehicle under Minister of Railways
2. Western dedicated freight corridor is supported by JETRO
3. Eastern dedicated freight corridor is supported by World Bank
4. Eastern corridor extends from Ludhiana to Dankuni
(a) 1, 3
(b) 2, 4
(c) 2, 3
(d) All the above

12. Which of the following is considered as an example of dirty subsidy?
(a) Subsidy on Fertilizers
(b) Subsidy on Food
(c) Subsidy on Diesel
(d) Subsidy on Alcohol

13. The Nehru-Mahalanobis model of development believes in
(a) Trickle down approach
(b) Decentralised approach
(c) Capitalistic approach
(d) Socialistic approach

14. Which of the following are true regarding CACP?
1. It is a statutory body
2. It’s recommendations are binding
3. It is under the ministry of
4. It revises MSP before every agriculture season
(a) 1, 2 are correct
(b) 3, 4 are correct
(c) 1, 2, 4 are correct
(d) All are correct

15. Which of the following statements are true with respect to Credit Default
1. It is an insurance against nonpayment of debt
2. CDS are allowed in India
3. Naked CDS are insurance against Gilt edged securities
4. CDS are used by companies to raise money from markets
(a) 1, 2
(b) 1, 4
(c) 1, 2, 3
(d) 2, 4



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