Test 1 Economy

- Demolish Prelims 2015 - Test 1

Total no. of Questions = 50

Time = 1 hour .

( 2 marks for correct answer & -2/3 for incorrect answer.)

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------1.)With reference to the current trends in Indian exports, consider the following regions:

1. Europe

2. America

3. Asia

4. Africa

There has been a consistent increase in India's exports to which among the above in recent years?

A) Only 1 & 2

B) Only 2 & 3

C) Only 3 & 4

D) Only 1 & 4

2.)With reference to the Financial Affairs of the

Government of India, which among the following

reports / documents are caused by the President to be

laid before Parliament annually?

1.Annual Financial Statement

2.Economic Survey

3.Medium-term Fiscal Policy Statement

4.Macro-economic Framework Statement

Choose the correct option from the codes given below:

A) Only 1

B) Only 1 & 2

C) Only 1, 2 & 3

D) 1 and 4

3.) Consider the following:

1. Stamp Duty

2. Property Tax

3. Excise Duty

Which among the above is / are "production taxes"?

A) Only 1 & 2

B) Only 2 & 3

C) Only 3

D) 1, 2 & 3

4.) With reference various sources of the tax revenue of

the Government of India, consider the following observations:

1. The contribution of Corporation Tax is significantly larger in comparison to the contribution of Income Tax

2. The contribution of Custom Duty is significantly larger in comparison to thecontribution of Service Tax

Which among the above observations is / are correct?

A) Only 1

B) Only 2

C) Both 1 & 2

D) Neither 1 nor 2

5.). With reference to India, consider the following:

1. Lower Trade Deficit

2. Higher Foreign Portfolio Investments

3. Higher External Commercial Borrowings

Which among the above help in lowering the Current Account Deficit?

A) Only 1

B) Only 1 & 2

C) 1, 2 & 3

D) Only 2 & 3

6.) With reference to the share of public and private sector in healthcare in India, Consider the following observations:

1. While private sector dominates in the outpatient care, public sector dominates in the inpatient care

2. While private sector dominates in urban region, public sector dominates in rural region

Which among the above is / are correct options?

A) Only 1

B) Only 2

C) Both 1 & 2

D) Neither 1 nor 2

7.) Which of the following is not a part of Broad Money in India?

A) Demand Deposits with Banks

B) Currency with the Public

C) Time Deposits with Banks

D) Banks' deposits with RBI

8.) With reference to poverty estimations, "poverty gap" refers to the difference between:

1. the level of consumption of households below poverty line (BPL) and abovepoverty line (APL)

2. the number of households in BPL and APL categories

3. the amount of cash needed to lift a BPL household above the poverty line

Select the correct option from the codes given below:

A) Only 1 & 2

B) Only 2 & 3

C) Only 1 & 3

D) 1, 2 & 3

9.) The issue of "duality of control" has been in news in recent times in connection with?

A) Urban cooperative banks

B) Reserve Bank of India (RBI)

C) National Bank for Agriculture and Rural Development (NABARD)

D) Deposit Insurance and credit guarantee corporation (DICGC)

10.) Comptroller and Auditor General of India audits the financial transactions related to:

1. Money received and spent from Consolidated Fund of India

2. Money received and spent by Government ministries and departments

3. Money received and spent by all bodies funded from Consolidated Fund of India

4. Grants and Loans by Government

5. Financial transactions of Panchayats if CAG is entrusted for the same


A) Only 1, 2 & 3 are correct

B) Only 1, 2, 3 & 4 are correct

C) Only 1, 3, 4 & 5 are correct

D) 1, 2, 3, 4 & 5 are correct

11.) In India Who manages public debt?

a. Govt

b. RBI

c. a and b.

d. Debt management agency

12.) Which is true -

1. Stamp duties and property taxes are part of production taxes.

2. GVA method has led to increase in Service sector contribution to GDP.

a. Only 1

b. Only 2

c. Both 1 & 2

d. None

13. )Which is false -

1. Central sales tax is an destination based tax.

2. VAT is origin based tax.

a. Only 1

b. Only 2

c. Both 1 & 2

d. None

14.) Which is true-

1. PSL norms apply to all SCB.

2. All SCBs have to follow the mandatory 40% criteria for PSL.

a. Only 1

b. Only 2

c. Both 1 & 2

d. None

15.) Which s true-

a. Export and Import will be zero-rated under GST regime.

b. Advance pricing agreement is devised to prevent transfer pricing benefits to corporates.

a. Only 1

b. Only 2

c. Both 1 & 2

d. None

16.) What is true about GIFT?

a.) GIFT = Global International Financial Tech. City recommended by NarendraModi.

b.)GIFT = Gujarat International Financial Tech. City recommended by Percy Mistry.

c.)GIFT = Government International Financial Transaction recommended by Percy Mistry.

d.)GIFT = Green Industrial Foreign Tech. City recommended by Raghuram Rajan.

17.) What is true about Kayakalp Council.

a.) It is a body under NITI headed by NITI Chairman.

b.) It is a body for GST implementation & headed by K M Mani.

c.) It is a body to revamp Subsidies .

d.) It is a body under railways headed by Ratan Tata.

18.)Liquidity Trap

a. Interest rates decreased to such a low level that in will only increase in Future.

b.Interest rates continuosly increased to unsustainable level.

c.Not related to Interest rates.

d.Huge public debt.

19.): Consider the following statements:

1. IT-ITES is the biggest employment generator in India.

2. CERT-In is the nodal agency to respond to computer security incidents as and when they occur.

Which of the statements given above is/are correct ?

(a) 1 only.

(b) 2 only.

(c) Both 1 & 2.

(d) Neither 1 nor 2.

20.): Consider the following statements:

1. Matters relating to the levy and collection of all direct taxes are looked after by CBDT.

2. Matters relating to levy and collection of customs and central excise duties,service tax and other indirect taxes fall within the purview of CBEC.

Which of the statements given above is/are correct ?

(a) 1 only.

(b) 2 only.

(c) Both 1 & 2.

(d) Neither 1 nor 2.

21.): Which of the following are the main recommendations of the 14th FC ??

1. Tax devolution should be the primary route for transfer of resources to the states.

2. The increased devolution of the divisible pool oftaxes is a compositional shift in transfers - from grants to tax devolution.

3. It views there is a need to change the sharing pattern in respect to various Centrally sponsored schemes. It wants the state to share a greater fiscal responsibility for the implementation of such schemes.

Which of the above are correct ?

(a) 1 & 2

(b) 2 &3

(c) 1 & 3

(d) 1,2 & 3.

22.): Non-tax revenue of Union Government largeky comprises:

1. Interest receipts

2. Loan repayments

3. Income tax

4. Dividents and profits

(a) 1 & 2

(b) 1,2 & 3

(c) 1,3 & 4

(d) 2,3 & 4

23.)

24.) What do we mean by the statement , " India has achieved national FOod security but has not ensured household food security?

a.) Each household does not have a buffer stock.

b.) Food production has shown an increase but per capita availibility has decreased.

c.) There is sufficient food stock but all households don't have acces to it.

d.) The number of people Below Poverty Line has Increased.

25.)Which Initiative of the GOvernment of India in the Power sector is eligible for earning Certified Emission Reduction ( Carbon Credits) under the Clean Development Mechanism.

a.)Rajiv Gandhi Grameen Vidyutikaran Yoajana.

b.) Bachat Lamp Yojana.

c.) Accelerated Rural Electrification Programme.

d.)Certification by the Bureau of Energy Efficiency.

26.)Consider the following statements in respect of the functions of the WTO?

1.) It seeks to make International trade free by establishing predictable and transparent Ground rules.

2.) It promotes capital flow from developed to developing countries.

3.) It provides a forum for trade negotiations.

4.) It works as a neutral agency for settlement of trade disputes.

Identify the correct statements from above.

a.) 1,3,4 b.) 2,3,4,

c.)1,2,3,4 d.) 1,2,3

27.) It is important to measure the level of poverty for various reasons. Which of the following is not one of the reasons for measuring poverty?

a.) Economic & Social Policies can be formulated only if an accurate picture ofpoverty is available.

b.) Political parties can effectively canvas support during elections if data on poor are made availbale.

c.) Targetting of poor by area and region is possible only if statistics of poor by region class etc. exist.

d.) Periodic measurement of data on Poverty helps measure the impact of policies & programmes meant for poverty reduction.

28.) A study commissioned by the Planning Commission in 2007 had indicated that by 2020, while India will have surplus of 56 million working people , the rest of the world will encounter a shortage of 47 million working people . The challange in matching the demand with the supply will be in providing the Indian Population with :

a.) English education

b.) Skill development

c.) Modern Housing

d.) Health Insurance.

29.) Consider the following statements:

(i) The RIRI as mentioned in economy survey stands for Rational Investor Ratings Index (RIRI).

(ii) The RIRI is computed by averaging a countrys GDP growth rate and its macro-economic indicators

(iii) The macro-economic indicators in RIRI is measured as the average of the fiscal deficit, current account deficit, and inflation (all with negative signs)

(iv) India scores above all the BRICS nation in RIRI

Which of the statements given above is/are correct?

(a) (i),(ii) and (iv) only

(b) (i),(ii),(iii) and (iv)

(c) (iii) and (iv) only

(d) (i), (ii) and (iii) only

30.) In January 2015, the central statistics office released a new GDP series that shifted the base year from 2004-05 to?

(i) 2009-10

(ii) 2010-11

(iii) 2011-12

(iv) 2012-13

31.) Since the end of June 2014 the international crude oil price declined by about 50%.Of this, about 17% (representing about 34% of the overall decline) was passed on to consumers while the government retained the rest.

Which of the above statement justifies the Government actions?

(a) Government doesnt want to share the margin with the people.

(b) Accounting for uncertainty about the future movement of prices, it wants to provide a necessary cushion to absorb the effect of higher oil prices in the future .

(c) Government of India had fixed the prices of its crude import by the past MOU with importing nation.

(d) The cost of refining has gone up significantly in the last few months.

32.) Indias overall revenue-to-GDP ratio (for the general Government) for 2014 is estimated at________ percent by the IMF.

(a) 19.5

(b) 25

(c) 29

(d) 33

33.) The new scheme Pahal by the Government of India is related to?

(a)Nutritional support to the secondary school children.

(b) Direct Benefits Transfer under Right to food act.

(c)Cash transfer to the farmers due to inclement weather and crop lost.

(d) Direct Benefits Transfer for LPG (DBTL).

34. )Consider the following statements:

(i) Government has raised gas prices from US$ 4.2 per million British thermal unit to US$ 5.6 and linking pricing, transparently and automatically, to international prices.

(ii)Government has recently disinvested 5 percent stake in Coal India Ltd. andyielded Rs 22,500 crore,of which 5,800 crore was from foreign investors.

(iii) Government has Instituted a major financial inclusionthe Pradhan Mantri Jan Dhan Yojana under which over 12.5 crore new accounts have been opened till mid-February 2014.


(a) (i) and (iii) only

(b) (i) and (ii) only

(c) (ii) and (iii) only

(d) (i),(ii) and (iii)

35.) Consider the following statements:

(i) Government has increased the FDI in Insurance sector from 24 percent to 49 percent.

(ii) As per the guidelines, FDI of up to 26 per cent come under automatic route and beyond 26 per cent and up to 49 per cent government approval is needed.

Based on the above statements chose the correct option?

(a) Statement I is only correct.

(b) Statement II is only correct.

(c) Both statements I and II correct.

(d) None of these.

36.) With reference to the Expenditure Management Commission (EMC) under the chairmanship of Dr. Bimal Jalan, consider the following statements:

(i) The Commission will submit its interim report before the Budget of 2015-16 and its final report before the Budget of 2016-17.

(ii) Review the major areas of Central government expenditure, and to suggest ways of creating fiscal space required to meet developmental expenditure needs, without compromising commitment to fiscal discipline.

(iii) Suggest measures to improve allocative efficiencies in the existing expenditure classification system, including focus on capital expenditure.


(a) (i) only

(b) (ii) only

(c)(i),(ii) and (iii)

(d) (ii) and (iii) only

37.) What does JAM Number Trinity solution means as per the Economic Survey 2014-15?

(a)Jan Dhan-Aadhaar-Mobile

(b)Jan Dhan-Awash-Mobile

(c)Jan Dhan-Account-Money

(d)Jan Dhan-Aadhaar-Market

38) With reference to the newly launched Kisan Vikas Patra (KVP), which among the following is / are

correct statements?

1. The KVP certificates can be issued in single as well as joint names

2. The KVP can be transferred from one person to any other person, multiple times

3. The KVP can be transferred from one post office to another

4. One can pledge the KVP certificates as security to avail loans

5. One can encash the KVP only after a lock-in period of 2.5 years


A) Only 1, 2 & 3

B) Only 1, 2, 3 & 4

C) Only 1, 4 & 5

D) 1, 2, 3, 4 & 5

39.) Which among the following is / are near money?

1. T-bills

2. Equity Shares of a company

3. Bill of Exchange

4. Debentures


A) Only 1 & 2

B) 1, 2 & 3

C) 1, 3 & 4

D) 1, 2,

40) Which among the following factors can trigger Demand Pull inflation?

1. Fall in the consumption expenditure

2. Increase in the level of unemployment

3. Sharp reduction in the income tax


A) Only 1

B) Only 1 & 2

C) Only 2 & 3

D) Only 3

41) Continuous increase in tax rates will result in:

A) Continuous increase in tax revenue of government

B) Continuous decrease in tax revenue of government

C) Increase in tax revenue up to a point and then decrease

D) Decrease in tax revenue up to a point and then increase

42) Recently, the European Central Bank (ECB) announced that it would introduce a big programme of

quantitative easing. Which among the following comprise

quantitative easing?

1. Cutting Interest Rates

2. Pumping Money in the economy directly

3. Issuing Bonds in the market


A) 1 & 2

B) 1 & 3

C) 2 only

D) 1, 2 & 3

43) Which among the following statements with respect to Inflation is / are true?

1. Inflation redistributes wealth from creditors to debtors

2. Rising inflation indicates rising aggregate demand

3. Inflation increases employment in the short run

4. Investment in the economy is boosted by the inflation in the short run

Which among the above is / are correct statements?

A) Only 1 & 2

B) Only 1, 2 & 3

C) Only 2 & 4

D) 1, 2, 3 & 4

44.)

45) With respect to a country, consider the following:

1. Final Goods

2. Intermediary Goods

3. Value added goods

4. Services

The total market value of which among the above is called Gross Domestic Product?

A) Only 1 & 4

B) Only 1, 2 & 4

C) Only 1, 3 &

D) 1, 2, 3 & 4

46) Rising NPAs or bad debts are one of the major

issues for Indian Banking Industry in recent times. In

this context, consider the following:

1. Lok Adalats

2. Debt Recovery Tribunals (DRT)

3. Sarfaesi Act

Which among the above work(s) as channel(s) to recover the bad debts?

A) Only 1 & 2

B) Only 2 & 3

C) Only 1 & 3

D) 1, 2 & 3

47) Consider the following:

1. Stamp Duty

2. Property Tax

3. Excise Duty

Which among the above is / are "production taxes"?

A) Only 1 & 2

B) Only 2 & 3

C) Only 3

D) 1, 2 & 3

48) Consider the following:

1. External Commercial Borrowings

2. NRI Deposits

3. Inward Remittances

Which among the above is / are part of India's external debt?

A) Only 1 & 2

B) Only 2 & 3

C) Only 1 & 3

D) 1, 2 & 3

49) What trends does the Human Development Index 2014 show about India?

1. India's HDI value is lowest among BRICS countries except Brazil

2. India's Gender Development Index ranking is lower than Bangladesh


A) Only 1

B) Only 2

C) Both 1 & 2

D) Neither 1 nor 2

50) The introduction of the GST is projected to be a

significant step in the field of indirect tax reforms in

India. How the proposed GST regime is different from

the current concept of taxation in India?

1. GST is a destination-based tax as against the present concept of origin-based tax

2. GST will be levied only by central government as against present system ofdual levy


A) Only 1

B) Only 2

C) Both 1 & 2

D) Neither 1 nor 2

Documents

Test 1 Economy