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Set 6: Part 3: Economics MCQ for Prelims
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Set 6: Part 3: Economics MCQ for Prelims

Akshay Kadam
With 5 yr UPSC coaching experience; I wl help u get conceptual clarity of topics & their Applied Understanding to score more.

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  1. Economics Test Series For Prelims unacademy Master Economics with the help of Conceptual Objective Practice Questions. By Prof. Akshay D Kadam https://unacademy.com/user/AkshayDKadar


  2. The term "Golden Revolution" is associated with: Consider the following figures in context with the "Components of Money Stock" Currency in Circulation is R1000 Cash with Banks is 2000 'Other Deposits with RBl is 1500 Demand Deposits with banks are 500 Time Deposits with banks are 500 What is the correct amount of narrow money? a) National Solar Mission b) National Horticulture Mission c) International Solar Alliance d) Gold monetization scheme a) 3000 b) 3500 c) 75000 d) 2000 https://unacademy.com/user/AkshayDKadam ppcom


  3. Which of the following is not an instrument of qualitative control of monetary policy in India? The primary purpose behind banks keeping of the Margin Requirements is: a) Regulation of the Consumer a) To fulfil RBI requirements b) To keep themselves Basel Credit b) Rationing of the Credit c) Margin Requirements d) Variable Costs and IlII compliant c) To maintain a cushion against the decline of value of security To earn profit Reserves d) https://unacademy.com/user/AkshayDKadam ppcom


  4. Which of the following external domestic agencies have been accredited by RBl to asses credit risk? 1) ICRA 2) CARE 3) Brickwork Reating 4) SMERA 5) Moddy's Options a) 1 2 3 and 4 b) 1 2 3 and 5 c) 1 and 2 d) All the above Which of the following are taken as Trigger points by RBl to initiate 'Prompt Corrective Action' against public sector banks? 1) Capital to Risk weighted Ratio(CRAR) 2) Net Non Performing Assets 3) Shortfall in Reserve Requirements 4) Return on Assets Options a) 1 2 and 3 b) 1 2 and 4 c) 2 3 and 4 d) 1 and 2 Only https://unacademy.com/user/AkshayDKadam


  5. Consider the following statements about American Depository Receipt 'Common Shares' Vs Preference Shares' 1) ADR is a certificate issued in United States declaring ownerships of while common shareholders do not have shares of foreign company. 2) ADR dividend is paid in US Dollars. 2) Preference share are less volatile than Which of the above statements are correct? a) Only 1 b) Only 2 c) Both 1 and 2 are True Consider the following statements about 1) Preference shareholders have voting rights voting rights commons shares but typically has less potential for profits. Which of the above statements are correct? a) Only 1 b) Only 2 c) Both 1 and 2 are True d) Neither 1 nor 2 correct https://unacademy.com/user/AkshayDKadam


  6. Term "SWIFT" recently in news because of MODI-PNB fraud is abbreviation derived from? ) In Indian Securities market, term "Depository Participant" refers to? a) Agents appointed by Depositories through which it interfaces with investor with a) Software For Worldwide the approval of SEBI for providing their services. b) Two depositories Viz National Securities Depository Limited and Center Intrbank Financial Transactions. Depository Services Limited. c) Interested investors who open account Financial Transactions. with Depository to participate in securities d) Society For Worldwide Interbank transactions d) These are companies whose share are listed on Stock Exchanges; and traded through depository Participants Interbank Financial Telecommunications. b) Software For Worldwide c) Society For Worldwide Interbank Financial Telecommunications https://unacademy.com/user/AkshayDKadam ppcom


  7. The organized money market in India is not a single market but conglomeration of markets of various instruments, which are called submarkets of money markets. These sub markets of money markets include Call Money, Notice Money and Term Money Market etc. Consider the following statements about Call Money, Notice Money and Term Money Market 1) Call Money refers to borrowing or lending of funds for 1 day. 2) Notice Money refers to borrowing and lending of funds for 2 to 14 days. 3) Term Money refers to borrowing and lending of funds for a period more than 14 days. Which of the above statements are correct? a) 1 and 2 only b) 1 and 3 Only c) 2 and 3 Only d) 12 and 3 Only https://unacademy.com/user/AkshayDKadam


  8. Consider the following statements about Money Markets instruments 1) Treasury Bills and Cash Management Bills are money market instruments with period less than 91 days 2) Repo, Reverse Repo and Marginal Standing Facility are not the money market instruments. Which of the above statements are correct? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct Which of the following falls under the category of a Scheduled Commercial Banks? 1) Foreign Banks 2) Regional Rural Banks 3) Local Area Banks 4) State Cooperative Banks Options - a) 1 2 and 3 only b) 1 2 and 4 Only c) 1 3 and 4 Only d) 1 2 Only https://unacademy.com/user/AkshayDKadam


  9. According to International Budget Project which of the following budgetary process is termed as Participatory budgeting? a) Citizens/Civil Societies deliberate and negotiate over distribution of Public resources. b) Budgeting in which State governments as well as Local governments participate in budgeting process c) Budgeting in which all ministries as well as their departments participate with Finance ministry in formulation of budget d) Budgeting in which Private Businesses, Government PSU and or Departments that contribute largest Which of the following represents correct ownership pattern of Regional Rural banks? a) Central Government 50%; State Government 15%; Sponsor Bank 35% b) Central Government 50%; State Government 35%; Sponsor Bank 15% c) Central Government 35%; State Government 15%; Sponsor Bank 50% d) Central Government 35%; State Government 50%; Sponsor Bank 15% https://unacademy.com/user/AkshayDKadam ppcom


  10. Consider the following statements about Zero Which of the following are Based Budgeting 1) In zero based budgeting no reference was 1) SLR made or considered of previous years; and expenses for each new period must be justified 3) MSF 2) Zero based budgeting is more suitable for 4) LAF organisations with Long term objectives. Which of the above statements are incorrect? a) 1 and 2 only a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct Statutory Pre-emption of RBl? 2) CRR Options b) 1 and 3 Only c) 1 and 4 Only d) 3 and 4 Only https://unacademy.com/user/AkshayDKadam fppt.com


  11. Consider the following statements about Real Investment Assertion A:Real investment means purchase of paper Securities, bonds, debentures and equities and not Loans and Bank accounts Reason R: Financial investment by depositing money in bank and/or taking loans do not represent real net wealth for the economy as the financial asset of one economy would be offset by a financial liability of another party Select correct answer using codes given below: a.Both A and R are correct and R is a correct explanation of A. b.Both A and R are correct but R is not a correct explanation of A. C.A is correct, R is incorrect d.A is incorrect, R is correct. https://unacademy.com/user/AkshayDKadam fpP


  12. Consider the following statements about Shanghai/China Growth Model viz a viz Indian Growth Model 1) Shanghai Model represents extreme version of Investment led growth Model while India followed Saving Led growth Model 2) In terms of Household income and small asset base India is Poorer than China 3) The Consumption to GDP ratio of India is lower than China Which of the above statements are correct? a) 1 and 2 only b) 1 and 3 Only c) 2 and 3 Only d) 1 Only Consider the following statements FDI and Fll have on inflation 1) Increased FDI is a measure to dampen inflation. 2) Economics has no rule to link FDI with Inflation 3) Unchecked Fll inflow and Outflow can bring Demand Pull Inflation 4) Economics has no rule to link Fll with Inflation. Which of the above statements are correct? a) 1 and 4 only b) 1 and 3 Only c) 2 and 3 Only d) 2 and 4 Only


  13. Consider the following statements about Liquidity Adjustment facility(LAF) of RBI 1) Repo rate is the rate at which banks borrow money from RBl; for short term needs without putting any collateral. 2) Repo rate is the rate at which banks borrow money from RBl; for short term needs by putting government securities as collateral. 3) Reverse repo is the rate at which banks park their excess fund with RBI. 4) Reverse repo is the rate at which RBl borrows money from banks by lending securities. Which of the above options are correct a) 1 and 3 only b) 1 and 4 Only c) 2 and 3 Only d) 2 and 4 Only https://unacademy.com/user/AkshayDKadam ppcom


  14. Consider the following statements about CASH RESERVE RATIO 1) CRR is amount of funds that banks are bound to keep aside from their net Demand and term liabilities with RBl on which RBl pays no interest to commercial banks. 2) The objective of the CRR is to ensure availability of Liquidity and solvency of the banks. 3) RBl increases CRR which leads to increased money supply in the economy and fall in interest rates Which of the above statements are correct? a) 1 and 2 only b) 1 and 3 Only c) 2 and 3 Only d) 1 2 and 3 India is passing through third stage of demographic transition; a stage of declining birth rate and low death rate. Which of the following best describes the population pyramid in third stage? a) Population pyramid expanding at bottom b) Population pyramid rapidly expanding c) Population pyramid is stationary d) Population pyramid is contracting


  15. Consider the following statements about Bank Deposit Insurance 1) Deposit Insurance and Credit Guarantee Corporation(DICGC) a statutory and an autonomous body created by an act of Parliament provides protection against lost of deposits kept with banks. 2) Only deposits kept by citizens in Scheduled commercial banks enjoys insurance cover of RBI. 3) The maximum amount per depositor insured is Rs 2 Lakhs including principle and interest. Which of the above statements are correct? a) 1 and 2 only b) 1 and 3 Only c) 2 and 3 Only d) None of the above Task Force appointed under ArvindPanagariya; under NITI aayog, supported the continuation of poverty line as defined by which of the following committee? a) AmartyaSen's definition of poverty b) Lakdawala Formula c) Tendulkar Committee d) Rangarajan Committee https://unacademy.com/user/AkshayDKadam


  16. Consider the following statements about Which of the following forms part of Non Agriculture Credit 1) According to RBlI, Agriculture loans on India'? which interest or instalment of principal 1 Dividends from PSU's. remain overdue for a period of more than 2) Grants in Aid 90 days from day of issuance of credit is 3) Money generated out of Stamp termed as Non Performing Asset. 2)A Bank can sell agri land under Sarfaesi if it has mortgaged and turned such as Banking, Insurance etc NPA Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct Tax revenue receipt of government of Printing, Currency Printing etc 4) Revenue generated from services Options a) 1 2 and 3 only b) 1 2 and 4 Only c) 2 3 and 4 Only d) 1 2 3 and 4 Only pP


  17. Consider the following statements about Priority Sector lending (PSL) target by RBl for government in which of the following domestic scheduled commercial banks and ways? foreign banks with 20 branches and above 1) By bringing change in aggregate 1) PSL target for Agriculture is 18% of Adiusted net bank credit. 2) PSL target for Micro Enterprises is 7.5% allocation of Adiusted net bank credit 3) PSL target for Advances to weaker sections is 10% of Adjusted net bank credit. 4) By controlling credit creation in the Which of the above statements are correct? economy. a) 1 and 2 only b) 1 and 3 Only c) 2 and 3 Only d) All of the above Fiscal policy can affect the demand 2) By changing pattern of resource 3) By bringing change in the distribution of income Options - a) 1 2 and 3 only b) 1 2 and 4 Only c) 2 3 and 4 Only d) 1 2 3 and 4 Only


  18. Any loan to Micro, Small and Medium enterprises comes under priority sector. MSME's are defined by termed as double financial Ministry of Micro Small and Medium enterprises as repression of banks- per investment limit in Plant and machinery. Consider 1) SLR the following statements about Micro enterprises 2) CRR 1) Micro enterprises in manufacturing sector are the 3) Priority sector lending ones in which investment in plant and machinery 4) Capital Adequacy Ratio does not exceed 25 Lakhs. 2) Micro enterprises in Service sector are the ones in which investment in plant and machinery does not a) 1 and 2 only exceed 10 Lakhs Which of the above statements are incorrect? a) 1 Only b) 2 Only c) Both 1 and 2 are correct d) Neither 1 nor 2 correct Which of the following is Norms Options b) 1 and 3 Only c) 1 and 4 Only d) 3 and 4 Only