Questions and answers for exam Preparation

MCQs

Total Questions : 10

Given below are two statements, one labeled as Assertion (A) and the other labelled as Reason (R):Assertion (A): An important policy instrument of economic liberalization is reduction in import duties on capital goods. Reason (R): Reduction in import duties would help the local entrepreneurs to improve technology to face the global markets.In the context of the above two statements, which one of the following is correct?

Both A and R are true and R is the correct explanation of A
Both A and R are true but R is not a correct explanation of A
A is true but R is false
A is false but R is true

Discuss Question

Answer: Option A. -> Both A and R are true and R is the correct explanation of A
:
A

Question 2.

Assertion: Per capita income does not give a true picture of the economic growth of a country Reason: Per capita income can increase if there is a fall in the population of the country.

Both A and R are individually true and R is the correct explanation of A;
Both A and R are individually true but R is not the correct explanation of A;
A is true but R is false;
A is false but R is true.

Discuss Question

Answer: Option A. -> Both A and R are individually true and R is the correct explanation of A;
:
A

Question 3.

Discomfort index is

a combination of longevity and literacy
a composite of standard of living and health indices
an index of cost of living
a composite of annual inflation and unemployment rate

Discuss Question

Answer: Option D. -> a composite of annual inflation and unemployment rate
:
D

Question 4.

Open Market Operations are:

activities of SEBI-registered brokers
selling of government bonds by RBI
issue of gilt-edged securities by the government
sale of shares by FIIs

Discuss Question

Answer: Option B. -> selling of government bonds by RBI
:
B

Question 5.

'Trickle Down Theory of Development' holds that:

global prosperity spreads to domestic economy
development spreads downwards through greater demand for labor
rate of growth of an economy is inversely proportional to the rates of taxation
none of the above

Discuss Question

Answer: Option B. -> development spreads downwards through greater demand for labor
:
B

Question 6.

Our Constitution stipulates that the State shall ensure that the economic system does not promote concentration of wealth and means of production. This principle is enshrined in:

Art. 14
Art. 39
Art. 41
Art. 19

Discuss Question

Answer: Option B. -> Art. 39
:
B

Question 7.

Insider trading is an offence under Indian laws. Who among the following will not, in the normal circumstances, be accused of insider trading?

A financial journalist covering a company
A director of the company
An auditor of the company
An employee of the company

Discuss Question

Answer: Option A. -> A financial journalist covering a company
:
A

Question 8.

It is said that, in order to control inflation, foreign inflow needs to be sterilized. Sterilization here refers to:

ensuring that black money is accounted for
compliance with import-export regulations
ensuring that counterfeit currency does not enter circulation
withdrawing equivalent local currency to maintain a desirable rate of exchange

Discuss Question

Answer: Option D. -> withdrawing equivalent local currency to maintain a desirable rate of exchange
:
D

Question 9.

Hawala transactions relate to payments

received in rupees against overseas currencies and vice versa without going through the official channels
received for sale/transfer of shares without going through the established stock exchanges
received as commission for services rendered to overseas investors/buyers/sellers in assisting them to get over the red tape and/or in getting preferential treatment
made to political parties or to individuals for meeting election expenses

Discuss Question

Answer: Option A. -> received in rupees against overseas currencies and vice versa without going through the official channels
:
A

Question 10.

Tobin Tax refers to: