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Exam Year: 2011

  • ,

    In India, which of the following have the highest share in total tax revenue of the Central Government?

    (a)

    Taxes on income

    (b)

    Taxes on commodities and services

    (c)

    Taxes on property and capital gains

    (d)

    Custom duties

    Correct Answer:

    (b)

  • ,

    In the context of the Indian economy, what does the term “deficit financing” refer to?

    (a)

    Financing by the Central Government to cover the deficit in the current account of the balance of payments.

    (b)

    Financing by the Central Government to cover the fiscal deficit by borrowing from the market.

    (c)

    Financing by the State Governments to cover their revenue deficit.

    (d)

    Financing by private corporations to cover their financial losses.

    Correct Answer:

    (b)

  • ,

    With reference to “Aam Admi Bima Yojana”. Consider the following statements: 1. The member insured under the scheme must be the head of the family or earning member of the family in a rural landless household. 2. The member insured must be in the age group of 30 to 65 years. 3. There is a provision for free scholarship for up to two children of the insured who are studying between classes 9 and 12. Which of the statements given above is/are correct?

    (a)

    1 only

    (b)

    2 and 3 only

    (c)

    1 and 3 only

    (d)

    1, 2 and 3

    Correct Answer:

    (c)

  • ,

    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 age group of 15-64 years.

    (c)

    Its high population in the age group above 65 years.

    (d)

    Its high total population.

    Correct Answer:

    (b)

  • ,

    Which one of the following statements appropriately describes the “fiscal stimulus”?

    (a)

    It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet 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.

    Correct Answer:

    (b)

  • ,

    What does the term “economic liberalization” refer to in the context of Indian economy?

    (a)

    Expansion of the public sector

    (b)

    Restriction of foreign investment

    (c)

    Removal of restrictions on private sector and encouragement of free market policies

    (d)

    Increase in trade barriers

    Correct Answer:

    (c)

  • ,

    The term “Gresham’s Law” is often mentioned in the context of economics. What does it state?

    (a)

    Bad money drives out good money when both are in circulation.

    (b)

    Good money drives out bad money when both are in circulation.

    (c)

    Inflation drives out deflation in the economy.

    (d)

    Market competition drives out inefficient producers.

    Correct Answer:

    (a)

  • ,

    A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “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 previous year on the calculation of inflation rate.

    (d)

    None of the statements (a), (b) and (c) given above is correct in this context.

    Correct Answer:

    (c)

  • ,

    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.

    (a)

    1 and 2 only

    (b)

    2 and 3 only

    (c)

    1 and 3 only

    (d)

    1, 2 and 3

    Correct Answer:

    (b)

  • ,

    What is the primary goal of the “Consumer Protection Act” in India?

    (a)

    To regulate the prices of essential commodities

    (b)

    To ensure the safety and protection of consumers from hazardous products

    (c)

    To promote competition among manufacturers

    (d)

    To prevent monopolies in the market

    Correct Answer:

    (b)