MCQ test

1. What is the main cause of all economic problems?

(A) Abundance
(B) Convenience
(C) Scarcity
(D) None of these

2. Study of aggregates is known as _________

(A) Macroeconomics
(B) Microeconomics
(C) Price theory
(D) Factor price determination

3. In order to encourage investment in the economy, the Central Bank may ________
(A) Reduce Cash Reserve Ratio
(B) Increase Cash Reserve Ratio
(C) Sell Government securities in the open market
(D) Increase Bank Rate

4. The central bank can increase the availability of credit by:

(A) Rasing repo rate
(B) Raising reverse repo rate
(C) Buying government securities
(D) Selling government securities

5. Which of the following is the function of a Central bank?

(A) Issue of notes
(B) Banker to the Government and Banks
(C) Supply and control of money
(D) All of these

6. The ratio of total deposits that a commercial bank has to keep with RBI is called:
(A) Statutory liquidity ratio
(B) Deposit ratio
(C) Cash reserve ratio
(D) Legal reserve ratio

7. Which of the following is the method of measuring National Income?

(A) Income method
(B) Product method
(C) Expenditure method
(D) All of these
8. Why are the intermediate goods not included in the National Income while measuring
National Income?
(A) To avoid double accounting
(B) It decreases income
(C) Intermediate goods are not good
(D) All of these

9. Which of the following items are excluded from GNP measurement?

(A) Purely financial transactions
(B) Transfer of used goods and non-market goods and services
(C) Illegal activities and the value of leisure
(D) All of these

10. Which one is true?

(a) GNP = GDP + Depreciation
(b) NNP = GNP + Depreciation
(c) NNP = GNP – Depreciation
(d) GNP = NNP – Depreciation

11. Net National Income at Factor Cost is called?

(a) National Income
(b) Gross Investment
(c) Domestic Income
(d) None of these

12. Which of the following is correct?

(a) Disposable Income = Personal Income – Direct Taxes
(b) Disposable Income = Private Income – Direct Taxes
(c) Disposable Income = Personal Income – Indirect Taxes
(d) Disposable Income = Private Income – Indirect Taxes

13. Which sector is included in an economy?

(a) Primary
(b) Secondary
(c) Tertiary
(d) All of these

14. In which year did India adopt the economic reforms?

(A) 1991
(B) 1993
(C) 1998
(D) 2001
15. Why there was a need for economic reforms in India?
(A) Due to fiscal deficit
(B) Due to adverse BOP
(C) Rise in prices
(D) All of the above

16. What is the main feature of New Economic Policy?

(A) Liberalization
(B) Privatization
(C) Globalization
(D) All of the above

17. Union Budget of India is presented by whom and in which house/ houses of the Parliament?
a) Finance Minister of India; Lok Sabha
b) Prime Minister of India; Rajya Sabha
c) Cabinet Secretary; Both Lok Sabha and Rajya Sabha
d) President of India; in joint session of Parliament

What is the mainstay of Indian economy?

(A) Manufacturing
(B) Business
(C) Public sector
(D) Agriculture

Which of the following Banks/ Institution acts as custodian of nation’s foreign

exchange reserve.
i) State Bank of India
ii) Reserve Bank of India
iii) IFCI
iv) Punjab National Bank