Economy mcqs#1
Q 1.In India, the term “Public Key Infrastructure” is used in the context of
a.Digital security infrastructure
b.Food security infrastructure
c.Health care and education infrastructure
d.Telecommunication and transportation infrastructure
Ans – a
Q 2.If another global financial crisis happens in the near future, which of the following actions/policies are most likely to give some immunity to India?
1. Not depending on short – term foreign borrowings
2. Opening up to more foreign banks
3. Maintaining full capital account convertibility
Select the correct answer using the code given below:
a.1 only
b.1 and 2 only
c.3 only
d.1, 2 and 3
Ans – a
Q 3.If you withdraw Rs. 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
a. to reduce it by Rs. 1,00,000
b. to increase it by Rs. 1,00,000
c.to increase it by more than Rs. 1,00,000
d. leave it unchanged
Ans – d
Q 4.“Golden Tranche” (Reserve Tranche) refers to
a. a loan system of the World Bank
b.one of the operations of a Central Bank
c.a credit system granted by WTO to its members
d.a credit system granted by IMF to its members
Ans – d
Q 5.Along with the Budget, the Finance Minister also places other documents before the parliament which include ‘The Macro Economic Framework Statement‘. The aforesaid document is presented because this is mandated by
a.Long-standing parliamentary convention
b.Article 112 and Article 110(1) of the Constitution of India
c.Article 113 of the Constitution of India
d.Provisions of the Fiscal Responsibility and Budget Management Act, 2003
Ans – d
Q 6.What is the importance of the term “Interest Coverage Ratio” of a firm in India?
1. It helps in understanding the firms that a bank is going to give loan to.
2. It helps in evaluation the emerging risk of a firm that a bank is going to give loan to.
3. The higher a borrowing Firm’s level of interest coverage ratio, the worse is its ability to service its dept.
Select the correct answer using the code given below :
a.1 and 2 only
b.2 only
c.1 and 3 only
d.1, 2 and 3
Ans – a
Q 7.Consider the following statements
1. The weightage of food in consumer price Index (CPI) is higher than that in Wholesale Price Index (WPI)
2. The WPI does not capture changes in the prices of services, which CPI does
3. Reserve bank of India has now adopted WPI and its key measures of inflation and to decide on changing the key policy rate
Which of the statements given above is/are correct?
a.1 and 2 only
b.2 only
c.3 only
d.1, 2 and 3
Ans – a
Q 8.With reference to the Indian economy consider the following statements?
1. ‘Commercial paper’ is short term Unsecure promissory note
2. ‘Certificate of Deposit’ is a long-term instrument issued by the Reserve bank of India to a corporation
3. ‘Call Money’ is short-term finance used for interbank transaction.
4. “Zero coupons bonds are the interest-bearing short-term bonds issued by the Scheduled Commercial Bank to corporation.
Which of the statements given above is/are correct?
a.1 and 2 only
b.4 only
c.1 and 3 only
d.2, 3 and 4 only
Ans – c
Q 9.With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristic?
a. It is the investment through capital instruments essentially in a listed company.
b.It is a largely non-debt creating capital flow.
c.It is the investment which involves debt-servicing.
d.It is the investment made by foreign institutional investors in the Government securities.
Ans – b
Q 10.With reference to the international trade of India at present, which of the following statement is/are correct?
1. India’s merchandise exports are less than its merchandise imports.
2. India’s imports of iron and steel chemicals, fertilisers and machinery have decreased in recent years.
3. India’s exports of services are more than its imports of services.
4. India suffers from an overall trade/current account deficit.
Select the correct answer using the code given below:
a.1 and 2 only
b.and 4 only
c.3 only
d.1, 3 and 4 only
Ans – d