03-03-2022

ECONOMICS
 Fiscal & Monetary Policy-
 Concept of Economic Growth and its  Planning vs Market Economy.
measurement  Economic Reforms in India
 Characteristics and problems of developing  Concept & Measurement of National Income.
economy  Role of RBI

Most Important MCQ’S

SESSION

Q 1 :- Macroeconomics as a separate branch of economics, emerged after the British economist John
Maynard Keynes published his book____________

A. The Wealth of Nations

B. On the Principles of political Economy and Taxation

C. The Affluent Society

D. The General Theory of Employment, Interest and Money

Q 2 :- Choose the false statement among the following statements:

A. The deletion, which is made from the value of gross investment in order to accommodate regular
wear and tear of capital, is called depreciation.

B. Net Investment = Gross investment - Depreciation

C. As per policy viewpoint, markets can be free market or Government controlled.

D. If more capital goods are produced now, less will be the productive capacity of the system in the
future.

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Q 3 :- While estimating national income, we include only the value of final goods and services in order to
_________.

a. make computation easier

b. avoid double counting

c. maximize national welfare of the people

d. evaluate the total economic performance of a nation

Q 4 :- Capital formation does not consist of ___________.

A Savings by the community

B Mobilization of savings of the country

C Investment
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Q 5 :- Three sector economy consists of ………..

 Francois Quesney gave the concept of
(a) households, business firms and industries
circular flow of income
(b) households, business firms and government sector

(c) households, government and foreign sector

(d) all of these

Q 6 :- Which of the following is NOT a capital good? SSC MTS - 2019 • Malik Tutorial
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a. Food and Clothing b. Truck +917298312652
c. Tools d. Machines

Q 7 :- Which one of the following is not a method of measurement of National Income?

(a) Value Added Method (b) Income Method

(c) Expenditure Method (d) Investment Method

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Q 8 :- In terms of economics, the total value of the output (goods and services) produced and income received
in a year by a domestic resident of a country put together is called

(a) Net National Product (b) Gross National Product

(c) Gross Domestic Income (d) National Income

Q 9 :- Per capita Income of a country derived from

(a) National Income (b) Population

(c) National Income and Population both (d) None of these

Q 10 :- Which among the following is a most suitable example of double counting in national income ?

(a) Wages of bus and train drivers.

(b) Cotton output and cotton cloth output.

(c) Electricity output and water output.

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(d) Tax receipts and earnings of inland revenue officials.

Q 11 :- GDP deflator is used to :

(a) measure the relative reduction in GDP growth rate of a country.

(b) measure the inflation in a country.

(c) compare the GDP of a country vis a vis other countries of the world.

(d) estimate the purchasing power of the citizen of a country

Q 12 :- National product at factor cost is equal to

(a) Gross domestic product - depreciation

(b) National product at market prices - indirect taxes + subsidies

(c) Domestic product + Net factor income from abroad

(d) National product at market prices + Indirect taxes + subsidies

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Q 13 :- Which one of the following equals Personal Disposable Income ?

a. Personal Income - Direct taxes paid by households and miscellaneous fees, fines, etc.

b. Private Income - Saving of Private Corporate Sectors - Corporation Tax

c. Private Income - Taxes

d. Total expenditure of Households - Income Tax - Gifts received

 Personal Disposable Income equals the amount of money available with the household for saving and
spending after deduction of all forms of taxes like the direct tax (Income Tax), and fees, fines, etc.
 Private Income - Saving of Private Corporate Sectors - Corporation Tax = the Personal Income
Q 14 :- Which of the following is not included in the calculation of National Income

a. Employers contribution to provident fund

b. Unemployment allowance

c. Free boarding and lodging provided to a domestic servant

d. Defence and security services

Q 15 :- From the following data calculate Net Value Added at Factor Cost :
(Items) (` in crore)
(i) Net Factor Income from Abroad 30
(ii) Sales 3,500
(iii) Purchase of Intermediate Goods 2,000
(iv) Consumption of Fixed Capital 500
(v) Exports 400
(vi) Indirect Taxes 350
(vii) Change in Stock 50

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Q 16 :- Calculate National Income from the following data :

(Content) (` in crore)
(i) Private final consumption expenditure 900
(ii) Profit 100
(iii) Government final consumption expenditure 400
(iv) Net indirect taxes 100
(v) Gross domestic capital formation 250
(vi) Change in stock 50
(vii) Net factor income from abroad (–) 40
(viii) Consumption of fixed capital 20
(ix) Net imports 30

Q 17 :- Which one leads to factor cost? Q 18 :- Final goods are used by the:

(a) Market price - Indirect taxes (a) consumers (b) producers

(b) Market price + Indirect taxes (c) government (d) all of these

(c) Market price - Net indirect taxes

(d) Market price + Net indirect taxes

Q 19 :- The difference between the National Income and the Net National Product at market price is
known as _______.

a. National debt transfer

b. Current transfers from the rest of the world

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Q 20 :- Which of the following items are not included in national income:

1. Intermediate goods 2. Transfer payments

3. Windfall gains 4. Sale of second-hand goods

5. Agriculture labor 6. Household service of housewives

Select the correct option from the following:

a. 1,2,3,4 and 6 b. 1,2,4,5 and 6

c. 1,3,4,5 and 6 d. All of the above

Q 21 :- According to Union Budget 2022-23 presented by FM Nirmala Sitharaman, GDP

growth in 2021-23 is expected to be ____________.

(a) 7.5% (b) 8.7% (c) 9.2% (d) 10.4%

Q 22 :- How much amount has been allocated to the Union Territory of Jammu and Kashmir
in the Budget 2022-23 as part of the central government's assistance, grants and loans.

a. 35,581.44 b. 34,704.46 c. 5958 d. 33, 924

 While J&K has been given Rs 35,581.44 crore for 2022-23, compared to Rs 34,704.46
crore in 2021-22, Ladakh has been given Rs 5,958, the same as in the current fiscal.

 Rs 33,923 crore- in the budget for J&K is under central assistance.

 A sum of Rs 273 crore for rehabilitation of Dal Nageen lake and

Rs 279 crore has been given as grants towards contribution to UT Disaster Response Fund.

 The budget allocated Rs 500 crore for capital expenditure of UT, Rs 476.44 crore -
towards equity for Ratle 800 MW hydroelectric project and
 Rs 130 crore for 624 MW Kiru hydroelectric project.

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Q 23 :- According to the Union Budget 2022-23, Total expenditure in 2022-23

estimated at ____.

(a) Rs. 34.83 lakh crore (b) Rs. 37.70 lakh crore

(c) Rs. 39.45 lakh crore (d) Rs. 48.55 lakh crore

Q 24 :- According to the Union Budget 2022-23, the revised Fiscal Deficit was
___________ % of GDP in FY22 as against 6.8% in Budget estimates.

FM Nirmala Sitharaman’s 4th Budget

(a) 6.3% (b) 6.9%
Fiscal deficit in 2022-23 estimated at
6.4% of GDP
(c) 6.5% (d) 6.2%

Q 25 :- Ken-Betwa river link project will be implemented at cost of __________________ to

benefit 900,000 farmers.

(a)Rs 55,000 crores (b) Rs 36,000 crores

(c) Rs 43,000 crores (d) Rs 44,000 crores

Q 26 :- Total receipts other than borrowings in 2022-23 estimated at Rs. _____________crore.

(a) Rs. 22.84 lakh crore (b) Rs. 27.70 lakh crore

(c) Rs. 29.45 lakh crore (d) Rs. 28.55 lakh crore

 Effective Capital Expenditure’ of Central Government estimated at 10.68 lakh crore in

2022-23, which is about 4.1% of GDP.

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Q 27 :- Budget 2022 focusses on how many areas or pillars?

(a) 1 (b) 2

(c) 3 (d) 4

Focus areas of Budget

1.PM GatiShakti
2.Inclusive Development
3.Productivity Enhancement & Investment, Sunrise opportunities, Energy Transition, and
Climate Action.
4.Financing of investments

 The seven engines that drive PM GatiShakti are Roads, Railways, Airports,
Ports, Mass Transport, Waterways and Logistics Infrastructure.

Q 28 :- Which of the following terms indicates a mechanism used by commercial banks for providing credit to the
government?

a. Cash Credit Ratio b. Debt Service Obligation

c. Liquidity Adjustment Facility d. Statutory Liquidity Ratio

Q 29 :- Consider the following statements regarding the Marginal Standing Facility (MSF) of RBI.
Which of the statements given below is/are correct?

a. It is used by all financial institutions.

b. It is a part of the liquidity adjustment facility.

c. It is a cheaper route to fulfil the overnight requirement of funds.

d. Banks use this route only if they exhaust all other channels to raise short-term funds.

e. All are true

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Q 30 :- If Reserve Bank of India reduces the cash reserve ratio, it will

A. Increase credit creation

B. Decrease credit creation

C. Have no impact on credit creation

D. Have no definite impact on credit creation

Q 31 :- Which of the following is not the function of Reserve Bank of India?

A. Frame monetary and credit policy

B. Keep government money in various account heads

C. Provide credit facility to the general public

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Q 32 :- Liquidity Adjustment Facility (LAF) was introduced in India on

recommendation of which committee?

a. Narasimham committee b. Tendulkar Committee

c. Nachiket Mor Committee d. Gadgil Committee

 The RBI introduced the LAF as part of the outcome of the Narasimham Committee on
Banking Sector Reforms of 1998

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Q 33 :- Which among the following are the examples of qualitative monetary

tools of credit control?

1. Open Market Operations 2. Credit Rationing

3. Statutory Liquidity Ratio 4. Moral Suasion

a. 1 and 4 only b. 2 and 4 only c. 3 and 4 only d. 2 and 3 only

 Qualitative Monetary tools
 Fixing Margin Requirements
 Consumer Credit Regulation
 Publicity
 Credit Rationing
 Moral Suasion
 Control Through Directives
 Direct Action
 Quantitative instruments
 Open Market Operations
 Liquidity Adjustment Facility (Repo and
Reverse Repo)
 Marginal Standing Facility,
 SLR, CRR, Bank Rate,

Q 34 :- A government budget is an annual financial statement which outlines estimated

government expenditures and expected government receipts or revenues for the forthcoming
fiscal year. Depending on the feasibility of these estimates which of the following is NOT the
budget type? SSC CHSL 2020

a. Deficit budget b. Balanced budget

c. Economy budget d. Surplus budget

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Q 35 :- Consider the following statements:

1) Reserve Bank of India can print and issue currency notes of

denominations from two rupee notes to ten-thousand rupee notes.

2) Reserve Bank of India maintains a separate issue department to look

after currency issue.

Which of the statement(s) given above is/are correct?

a. Only 1 b. Only 2 c. Both a & b d. None of these

Q 36 :- What was the highest denomination note ever printed by RBI ?

a. Rs 5000 b. Rs 10000 c. Rs 2000 d. Rs 100000

 The highest denomination note ever printed by the Reserve Bank of India was the
₹10000 note in 1938 which was demonetized in January 1946. The ₹10000 was
again introduced in 1954. These notes were demonetized in 1978

 The paper currently being used for printing of banknotes in India is made by using
100% cotton

 Fifteen languages

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Q 37 :- What is the Inflation target range set by Monetary Policy Committee?

a. Target: 3%, Upper tolerance level: 5%, Lower tolerance level: 1%

b.Target: 4%, Upper tolerance level: 6%, Lower tolerance level: 2%

c.Target: 6%, Upper tolerance level: 3%, Lower tolerance level: 9%

d.Target: 4%, Upper tolerance level: 3%, Lower tolerance level: 5%

Q 38 :- Which of the following statements is incorrect about Monetary Policy

Committee?

a) There are six members in the committee.

b) Three Members are from the RBI and other three members appointed by
the Central Government

c) Finance minister is the Chairman of the committee

d) Governor is the Chairman of the committee

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Q 39 :- Consider the following statements with reference to Cash Reserve Ratio (CRR) and
Statutory Liquidity Ratio (SLR):

1. CRR is the fraction of the total Net Demand and Time Liabilities maintained by bank with
itself in form of cash deposits.

2. SLR is the fraction of the total Net Demand and Time Liabilities maintained by bank with
RBI in form of specified liquid assets.

3. CRR and SLR are part of Liquidity Adjustment Facility (LAF).

4. Bank may earn returns on money parked as SLR and CRR

Which of the statements given above is/are correct?

a. 1 and 2 only b. 3 and 4 only c. 1, 2 ,3 and 4 d. None of the above

Q 40 :- In India, deficit financing is used for raising resources for

(a) economic development

(b) redemption of public debt

(c) adjusting the balance of payments

(d) reducing the foreign debt

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Q 41 :- Fiscal deficit in the union budget is equal to

a) Net increase in internal and external borrowings

b) The difference between current expenditure and current revenue

c) The sum of monetized deficit and budgetary deficit

d) Net increase in the union government’s borrowing from the

Reserve Bank of India

Fiscal deficit = Total Expenditure – Total revenue (Excluding the borrowings)

Q 42 :- Which of the following is NOT part of Fiscal Policy? UPRVUNL JE ME-2021

a. National Insurance b. Interest Rate

c. Income tax d. VAT

Q 43 :- Which of the following is not a Fiscal Measure of controlling inflation?

A. Increase in Public Borrowings

B. Increase in Income Tax Rates

C. Increase in Statutory Reserve Requirements

D Control over Public Expenditures

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Q 44 :- According to the provisions of the Fiscal Responsibility and Budget Management

(FRBM) Act, 2003 and FRBM Rules, 2004, the government is under obligation to present
three statements before the Parliament along with the annual budget.

Which one of the following is not one of them?

a) Macroeconomic framework statement

b) Fiscal policy strategy statement

c) Medium-term fiscal policy statement

d) Short-term fiscal policy statement

Q 45 :- Which one of the following is responsible for bringing out the

report on national and per capital income in India?

a) Ministry of Planning

b) Ministry of Human Resource Development

c) Ministry of Home Affairs

d) Ministry of Statistics and Programme Implementation

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Q 46 :- The main reason for the low growth rate in India in spite of high
rates of savings and capital formation is ? (IAS/1995)

a) High Birth rate

b) Low level of foreign investment

c) Low capital/output ratio

d) High capital/output ratio

 Capital output ratio is the amount of capital

needed to produce one unit of output.

Q 47 :- India opted for 'Mixed Economy' in ________.

a. First Five Year Plan

b. Second Five Year Plan

c. Industrial Policy of 1948

d. None of the above

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Q 48 :- 'Globalisation of Indian Economy' means:

(a) stepping up external borrowings

(b) establishing Indian business units abroad

(c) having minimum possible restrictions on economic relations with other

countries

(d) giving up programmes of import substitution

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Q 49 :- Which is not the aim of Liberalisation and Globalisation?

A. More production at all levels

B. Increase in the trade of goods and services

C. Generating more employment opportunities

D. Increase in the subsidies to the poor and deprived sections of society

E. Both C & D

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Q 50 :- How can government of a country play a major role in making

Globalization fairer?

A. Government can ensure that labor laws are properly implemented and the
workers get their rights.

B. Government can support small producers to improve their performance till the
time they become strong enough to complete

C. Government can negotiate at WTO for fairer rules.

D. All of them

Q 51 :- 'Balanced Growth' means:

A. growth which brings about a balance between the public and private sectors

B. growth which brings about a balance between the rich and the poor

C. growth pattern on which simultaneous investments are made in all the

sectors of the economy, viz., Agriculture, Industry, Transport, Communication,
etc.

D. growth which brings about a balance between the traditional and modern
sector

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Q 52 :- After 1991, the Central Government implemented various far-reaching

reforms in the area of taxation. This was based on the recommendations of the:

(a) Wanchoo Committee

(b) Rajah Chelliah Committee

(c) Raj Committee

(d) Narsimhan Committee

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Q 53 :- In the pre-reforms period (i.e. before 1991), there were restrictions with
respect to ______________.

A. Foreign Equity Participation in Indian Industries

B. Import of Foreign Technology

C. (a) but not (b)

D. Both (a) and (b)

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Q 54 :- Which of the following is/are feature(s) of the New Economic Policy?

1. This set of policies can broadly be classified into two groups: the
stabilization measures and the structural reform measures.

2. The policy was intended to move towards a lower economic growth rate
and to build sufficient foreign exchange reserves.

3. It converted the Indian economy into a market economy by removing all

kinds of unnecessary restrictions.

a. 1 and 2 only b. 2 and 3 only

c. 1 and 3 only d. 1, 2 and 3

Q 55 :- What led the Indian government to adopt LPG policy?

A. Foreign exchange reserves dropped immensely

B. Rising prices of essential goods

C. Government was unable to repay borrowings from abroad

D. All of the above

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Q 56 :- The fiscal deficit during 1990-91 was as large as ..................... of GDP.

(a) 8.1% (b) 7.6% (c) 8.4% (d) 8.9%

Q 57 :- Which of the following characteristics are most likely found in developing

countries?
a. high population growth rates.
b. large number of people living in poverty.
c. very traditional methods of agricultural production.
d. all of the above

Q 58 :- One of the features of a free market economy is

(SSC CGL 1st Sit. 2015)

(a) public ownership of factors of production

(b) rationing and price control

(c) consumer's sovereignty

(d) active state intervention

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Q 59 :- Surplus budget is recommended during : (SSC CGL 1st Sit. 2015)

(a) Depression (b) Boom

(c) War (d) Famines

Q 60 :- Which is the parameter for the economic development ?

(SSC CGL 1st Sit. 2016)

(a) Per capita monetary income (b) National income

(c) Per capita rural income (d) Population

• 1d 2d 3b 4d 5b 6a 7d 8b 9c 10b 11b 12b 13a 14b 17c

• 18d 19c 20a 21c 23c 24b 25d 26a 27d 28d 29d 30a 31c

• 32a 33b 34c 35c 36b 37b 38c 39d 40a 41a 42b 43c 44d

• 45d 46d 47b 48c 49d 50d 51c 52b 53d 54c 55d 56c

• 57d 58c 59b 60a

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