Tuesday, May 18, 2010

upsc-exams-upsc-exam-indian-civil-services-preliminary-exam-2010-Economics-model-test

Economics full test
1. Indian Planning can be best described as aiming at
a) Achievement of industrial growth b) Growth with Social Justice c) Socialism d) Regional prosperity

Ans : b

2. India is called a dualistic economy because:
a) Both the rich and poor people co-exist side by side
b) It has both foreign trade and Internal Trade
c) Industry and Agriculture co-exist side by side
d) Modern Sector and traditional sector co-exist side by side

Ans : d

3. The Swaran Jayanthi Shahri Rozgar Yojana aims to provide gainful employment to the urban unemployment or underemployed but does not include:
a) Nehru Rozgar Yojana
b) Urban Basic Service Programme
c) Prime Minister’s Rozgar Yojana
d) Prime Minister’s Integrated Urban Poverty Eradication Programme

Ans :c

4. Resurgent India Bonds were issued
a) to mopup black money
b) to prevent hawala transactions
c) to step up the rate of savings
d) to fight economic sanctions in the wake of Pokharan blast.

Ans : d

5. A rise in ‘SENSEX’ means
a) a rise in the prices of shares of all companies registered with Bombay Stock Exchange
b) a rise in the prices of shares of all companies registered with National Stock Exchange
c) an overall rise in the prices of shares of a group of companies registered with Bombay Stock Exchange
d) a rise in the prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange.

Ans : c

6. Match the following:
List I List II
A. Boom 1. Business activity at a high level with increasing income, output and
employment at macro level.
B. Recession 2. Gradual fill in income, output and employment with business activity in a
low gear.
C. Recovery 3. Steady rise in the general price level and income, output and employment.
D. Depression 4. Unprecedented level of unemployment and drastic fall in income and output.
A B C D A B C D A B C D A B C D
a) 1 2 3 4 a) 1 2 4 3 a) 2 1 4 3 a) 2 1 3 4

Ans : a

7. Match the following:
List I List II
A. World Economic Forum 1. World Development Report
B. Development Programme 2. Human Development Report
C. Indira Gandhi Institute of Development Research 3. Global Competitiveness Report
D. World Bank 4. India Development Report
A B C D A B C D A B C D A B C D
a) 4 1 2 3 a) 3 2 4 1 a) 1 2 4 3 a) 2 4 3 1

Ans : b

8. The primary function of the Finance Commission in India is to recommend:
a) distribution of plan funds between the Centre and the State
b) to the President on financial matters
c) allocation of funds to various Ministries of the Union and State Governments
d) distribution of non-plan funds from the Centre to States.

Ans : d

9. Which among the following markets deals with government securities?
a) Primary Market
b) Secondary Market
c) Gilts Market
d) Foreign Exchange Market

Ans : c

10. Which among the following is wrongly matched?
a) Sensex - Bombay Stock Exchange
b) National Index - Over the Counter Exchange of India
c) NIFTY - National Stock Exchange
d) Lyons Range - Calcutta Stock Exchange

Ans : b

11. Tobin Tax is a tax on
a) Zero tax companies
b) export profits
c) Interstate movement of goods
d) Foreign currency transactions

Ans : d

12. Minimum Alternate tax is a tax on:
a) Film Industry b) Professionals c) Zero tax companies d) Capital gains

Ans : c
13. The concept of ‘Golden Share’ is designed to:
a) grant autonomy to Public Sector units
b) implement ‘golden handshake’ schemes in Public Sector units
c) introduce the gold bond scheme
d) grant veto power to the government to veto management decisions in such of the PSUs where government’s shareholding is diluted to 26% or below.

Ans : d
14. Which among the following is the regulatory authority for giving clearance for External Commercial borrowing?
a) Foreign Investment Promotion Board
b) RBI
c) SEBI
d) Foreign Investment Promotion Council

Ans : b

15. Which among the following is the oldest Development Financial Institution of India?
a) UTI b) IDBI c) ICICI d) IFCI

Ans : d

16. Which among the following organisations prepares the World development Indicators?
a) IMF b) UNDP c) UNESCO d) World Bank

Ans : d

17. Which among the following is true?
1. Decrease in Cash Reserve Ration injects higher liquidity in the system.
2. Higher Liquidity in the system may soften interest rates
3. Higher market borrowing by the government leads to rise in interest rates
a) 1 and 2 b) 1 and 3 c) 2 and 3 d) 1, 2 and 3

Ans : d

18. Match the following:
A. Committee on Restructuring of Weak Banks 1. Eepak Parikh
B. Committee on Competition Law 2. M.S. Verma
C. Committee on Unit Trust of India 3. L.C. Gupta
D. Committee on Derivative Trading 4. S. Raghavan
A B C D A B C D A B C D A B C D
a) 2 4 1 3 a) 4 3 2 1 a) 1 2 3 4 a) 1 4 3 2

Ans : a

19. The busy season of Indian agriculture is
a) April - August b) June - September c) October - May d) August - December

Ans : c

20. Land Development Banks provide credit to farmers for
a) short term needs b) medium term needs c) Long term needs d) a temporary period

Ans : c

21. One of the following is not a cause of black money in India:
a) Rising public expenditure b) Inflation
c) Political finance and Standard of public morality d) Population growth

Ans : d

22. The Zero Base Budgeting in India was first experimented from
a) April, 1987 b) April, 2000 c) April, 1991 d) None of these

Ans : a

23. Match the following:
List I List II
A. Council for Advancement of
Small Industries 1. People’s Action & Rural Technology
B. ICICI 2. Agricultural Marketing
C. NAFED 3. Industrial Finance
D. National Equity Fund 4. Rural Technology
A B C D A B C D A B C D A B C D
a) 3 4 2 1 a) 4 3 2 1 a) 1 2 3 4 a) 1 4 3 2

Ans : b

24. Match the following:
List I List II
A. MRTP Act 1. 1951
B. Long Term Fiscal Policy 2. 1965
C. Agricultural Prices Commission 3. 1969
D. Industries (Development and
Regulation Act 4. 1985
A B C D A B C D A B C D A B C D
a) 3 4 2 1 a) 4 3 2 1 a) 1 2 3 4 a) 1 4 3 2

Ans : a

25. Laffer Curve is a curve that seeks to establish relationship between:
a) tax rate and inflation b) tax rate and tax revenues
c) inflation & unemployment d) money supply and growth rate

Ans : b

26. ‘Liquidity trap’ is a situation in which:
a) people want to hold only cash because prices are falling everyday
b) people want to hold only cash because there is too much f liquidity in the economy
c) the rate of interest is so low that no one wants to hold interest bearing assets and people wants to hold cash
d) there is an excess of foreign exchange reserves in the economy leading to excess of money supply.

Ans : c

27. The RBI uses the following instruments for quantitative control of credit:
1. Cash Reserve Ratio 2. Bank Rate 3 Open Market Operations 4. Margin Requirements
a) 1 and 2 b) 2 and 4 c) 1, 2 and 3 d) 1, 2, 3 and 4

Ans : c


28. Duty imposed to bring the price an imported product equal to or higher than the corresponding domestic product is called:
a) Anti-dumping duty b) Countervailing duty c) Auxiliary duty d) Special custom duty

Ans : b

29. The bogey of overpopulation was first raised by:
a) T.R. Malthus b) Adam Smith c) Alfred Marshall d) John Keynes

Ans : a

30. The Rolling Plan was stared in India after:
a)7th plan b) 5th plan c) 6th plan d) 4th plan

Ans : b

31. A Scheduled Bank is a bank:
1. having deposits of Rs.100 crores and more
2. having paid up capital of Rs.100 croresand more
3. having fixed deposits of Rs.100 crores and more
4. listed in the Second Scheduled of the RBI Act
a) 1 and 4 b) 2 only c) 4 only d) 2 and 4

Ans : c

32. The Regional Rural Banks were first set up in
a) 1980 b) 1975 c) 1971 d) 1965

Ans : b

33. How many banks were nationalised in the year 1980?
a) 14 b) 8 c) 2 d) 6

Ans : d

34. The fixation of “Support Price” for some agricultural commodities is done by the government with the objective of
a) benefiting the consumers under PDS b) giving a high price to the farmers their produce
c) providing a support so as to prevent a fall in the price of commodities d) Maintaining buffer stocks

Ans : c

35. The term “Hot Money” means
a) Currency whose value is likely to fall sharply
b) Currency whose value is likely to go up rapidly.
c) Money which ahs a tendency to fly out of the country
d) Currency which commands high value in international market.

Ans : c


36. UNCTAD is a forum of the:
a) developed countries b) developing countries c) OPEC countries d) communist bloc

Ans : b

37. The Agricultural Holding Tax (AHT) was recommended by a committee headed by
a) C.H. Hanumantha Rao b) M.L. Dantwala c) R.J. Chelliah d) K.N. Raj

Ans : d

38. Under the Lead Bank Scheme, the lead bank is:
a) RBI only b) State Bank of India c) Every public sector bank d) every regional rural bank

Ans : c

39. When was the RBI nationalised?
a) 1934 b) 1955 c) 1949 d) 1941

Ans : c

40. Capital Market means:
a) financing market dealing in short term funds
b) market in which capital goods are traced
c) financial market dealing in long term funds
d) market which deals with foreign exchange

Ans : c

41. Absolute Poverty means:
a) Poverty in terms of absolute number of people
b) Poverty in terms of the basic minimum calorie requirements
c) Poverty in terms of the prevailing price level
d) Poverty in terms of the absolute level of unemployment

Ans : b

42. A ‘Giffen Good’ is a good
a) whose demand falls with a rise in its price
b) whose demand falls with a rise in the income of the consumer
c) whose demand rises with a rise in its price & falls with a full in its price
d) whose demand rises with a rise in the income of the consumer

Ans : c

43. The simultaneous existence of recession and inflation is called
a) Deflation b) Reflation c) Disinflation d) Stagflation

Ans : d

44. Paper currency not backed buy gold or silver is called
a) Standard money b) Gold Standard c) Fiduciary issue d) Bimetallism

Ans : c
45. CAMELS refers to
a) a new desert missile to be developed by India
b)An acronym providing criteria for bank supervision
c) An acronym related to trade and commerce between SAARC countries.
c) An acronym providing criteria for imports and exports

Ans : b

46. Which of the following provides assistance essentially to promote private Sector investment of member countries?
a) International Bank for Reconstruction and Development
b) International Finance Corporation
c) International Development Association
d) International Monetary fund

Ans : b

47. Which of the following accounts for Cost-Push Inflation?
a) Increase in money supply b) Increase in indirect taxation
c) Increase in population d) Increase in non-plan expenditure

Ans : b

48. Which of the following is least liquid?
a) Cash b) Bill of Exchange c) Share d) Bond

Ans : d

49. Brand Equity Fund is a fund set up to:
a) promote equity participation by foreigners in Indian companies.
B) provide finance to companies which fall short of funds by way of sale of equity
c) protect the small-scale sector against competition form the large-scale sector
d) promote Indian brand names abroad

Ans : d

50. ‘Garibi Hatao’ was first of all adopted as a major objective of
a) 5th plan b) 6th plan c) 4th plan d) 3rd plan

Ans : a

51. The banking sector can have larger funds with itself if:
a) SLR is raised b) Both SLR and CRR are raised
c) Both SLR and CRR are lowered d) Bank rate is lowered

Ans : c







52. Debt-Equity Swap is an arrangement under which:
a) a debt instrument is purchase don the secondary market in exchange for an equity investment in the company
b) one country takes over the debt liability of another country
c) a financial institution converts part of its debt given to a company into equity of that company
d) a condition is imposed by lending country in such a way that if it gives some loan, it will have the right to invest in equity.

Ans : a

53. The Prime-Lending Rate of a bank means:
a) the ceiling rate of interest at which it lends
b) The floor rate of interest at which it lends
c) The rate of interest at which it lends to its prime borrowers
d) The rate of interest at which it lends to the government

Ans : c

54. International Finance Corporation provides:
a) Soft loans to member nations b) Soft loans to private enterprise in member nations
c) developmental assistance to governments of member nation
d) developmental assistance to private entrepreneurs in member nations

Ans : d

55. Dear Money Policy implies:
a) High price Level b) Large Money supply c) High production d) High interest rates

Ans : d

56. The Economist who described the process of economic development on the basis of five stages of economic growth was:
a) Gunnar Myrdat b) Raguar Nurkse c) W.W. Rostow d) Brahmananda

Ans : c

57. Match the following:
List I List II
A. Balance of Payments & Foreign Investment 1. Rakesh Mohan
B. Public Sector Enterprises Autonomy 2. Arjun Sen Gupta
C. Small Scale Industries 3. Rangarajan
D. Infrastructure Development 4. Abid Hussain
A B C D A B C D A B C D A B C D
a) 1 4 2 3 a) 3 2 4 1 a) 1 2 3 4 a) 2 1 4 3

Ans : a

58. The Fourth and the Sixth Five-Year Plans covered the period 1969-74 and 1980-85 respectively. The Fifth Plan covered the period:
a) 1975-79 b) 1976-80 c) 1974-79 d) 1974-80

Ans : c

59. Special Drawing Rights are created by the IMF to solve the problems of:
a) Balance of Payment deficits b) International Liquidity
c) Scarcity of hard currencies d) Export Promotion

Ans : b

60. Petro Bonds are bond:
a) issued to cover the oil pool deficit
b) issued by Iraq to foreign countries to raise resources due to Gulf War
b) Issued by Western nations to borrow money from OPEC nations for purchase of oil
d) Issued by Iraq to pay war damages to Kuwait

Ans : a

61. The concept of Rolling Plan was given by:
a) Rostow b) Nurkse c) Jagdish Bhagwati d) Gunnar Myrdal

Ans : d

62. Unemployment that results in the process of Switchover from one job to another is called
a) Cyclical Unemployment b) Seasonal unemployment
c) Frictional Unemployment d) Disguised Unemployment

Ans : c

63. The effect of inflation on tax revenue result in a situation known as
a) Stagflation b) Fiscaldrag c) Reflation d) Disinflation

Ans : b

64. Choose the correct sequence in which the above were established is
1. Industrial Finance Corporation of India
2. Industrial Credit and Investment Corporation of India
3. Industrial Development Bank of India
4. Unit Trust of India
a) 1, 2, 3, 4 b) 1, 3, 2, 4 c) 4, 3, 2, 1 d) 1, 2, 4, 3

Ans : d

65. Which of the following are the objective of the Commission for Agricultural Coasts and Prices?
1. To stabilise agricultural prices
2. To ensure meaningful real income levels to the farmers
3. Maintain intercrop price parity
4. ensure maximum price for the farmer
a) 1, 2 and 3 b) 1, 2 and 4 c) 1,3 and 4 d) 2, 3 and 4

Ans : a






66. Which of the following constitute the World Bank?
1. International Bank of Reconstruction and development
2. International Finance Corporation
3. International Development Association
4. International Monetary fund
a) 1,2 and 3 b) 1 and 2 c) 1 and 3 d) 1, 2, 3 and 4

Ans : a

67. Among the reasons for disguised unemployment in the rural areas is
Choice of a heavy industry model for economic development
b) Low levels of technological development in the country
c) Heavy pressure of population along with slow implementation of land reforms
d) High illiteracy rate

Ans : c

68. “Growth Centres” is a scheme designed to
a) develop small scale industries b) industrialise backward areas
c) promote free trade d) promote young entrepreneurs

Ans : b

69. Sunrise Industries are industries
a) which are well-developed and have ample scope for further development
b) which improve export performance of the country
c) which are small scale industries
d) which have high growth potential and meet further requirements of the economy

Ans : d

70. Ad Valorem means:
a) According to value
b) According to weight
c) According to size
d)rding to advertisement costs

Ans : a

71. Invisible trade is trade
a) of corporate and financial institutions with government
b) of government with public institutions
c) of government with other countries
d) of the sources like the banks, marine companies and shipping companies

Ans : d

72. Which arrangement of the following would show the correct sequence of demographic transition as typically associated with economic development?
1. high Birth Rate with High Death Rate 2. Low Birth Rate with Low Death Rate
3. High Birth Rate with Low death Rate
a) 1, 2, 3 b) 1, 3, 2 c) 3, 1, 2 d) 2, 1, 3

Ans : B



73. ‘Foof Loose’ Industries are Industries:
a) which are sick
b) which can be set up anywhere irrespective of closeness to the source of raw material
c) which are set up in backward areas
d) which are run by foreign investors

Ans : b

74. Which Committee’s recommendations for the restructuring of Unit Trust of India US-64 Scheme have been accepted by the Government?
a) Dave Committee b) Rangarajan Committee c) Chelliah Committee d) Parekh Committee

Ans : d

75. Open-ended Mutual Funds are funds:
a) available for purchase and repurchase throughout the yer b) listed on the Stock Exchange
c) having a fixed tenure d) which can be subscribed only during a specified period of the year

Ans : b

76. Diamond - Dollar account is an account
a) which can be maintained by an individual in a bank in the form of diamonds or dollars
b) maintained by Indian Government with US federal Bank in the form of diamonds
c) maintained with Indian Banks by NRIs
d) maintained by a diamond Exporter in the form of retaining his dollar earnings

Ans : d

77. Commercial Banks in India are required to maintain a certain ratio between their cash in hand and total assets. This ratio is called
a) Cash Reserve Ratio b) Statutory Liquidity Ratio c) Capital Adequacy Ratio d) Debt-Equity Ratio

Ans : b

78. The Central Government maintains buffer stocks of foodgrains commensurate to the requirements of
1. prescribed minimum buffer stocks for food security
2. operational stocks for monthly releases throuth the PDS
3. market intervention stocks for release in the open market to augment supply and help mode rate open market price
a) 1 only b) 2 only c) 1 and 2 only d) 1, 2 and 3

Ans : c

79. The New Agriculture Policy (2000) aims at:
a) Rainbow Revolution b) Yellow Revolution c) Intensive Green Revolution d) White Revolution

Ans : C


80. The revised Wholesale Price Index covers:
a) 447 commodities b) 435 commodities c) 465 commodities fd) 415 commodities

Ans : b

81. There are statutory Commodity Boards responsible for production, development and export of all the following except
a) Rubber B) Spices c) Tobacco d) Minerals

Ans : d

82. Derivatives Trading implies:
a) Speculation whereby future value of an asset is derived on the basis of a spot price
b) Gambling whereby maximum gains are derived by selling an asset in the forward market
c) Gambling whereby gains and losses are shared by buyer and seller
d) Speculation which involves Badla

Ans : a

83. The term ‘Badla’ in the context of stock market means:
a) Finance charges paid for carrying forward a transaction from one settlement period to the next
b) Converting cash into an asset
c) imposing penalty on the broker for concealing information
d) Payment of tax by a broker for enlisting himself on the stock exchange

Ans : a

84. Who coined the term ‘Green Revolution’?
a) Dr. William Gadd b) Dr. M.S. Swaminathan c) C. Subramaniam d) K.N. Raj

Ans : a

85. To prevent recurrence of seems in indain capital market the Governemtn of India has assigned regulatory power to
a) RBI b) Ministry of finance c) IDBI d) SEBI

Ans : d

86. ‘Operation Flood’ is a programme aimed at bringing about
a) Milk revolution b) Pulses revolution c) Wheat revolution d) Oilseeds revolution

Ans : a

87. Kharif crops are harvested in
a) June - April b) October - November c) March - April d) December - January

Ans : b





88. The causes of black money do not include one of the following:
a) political instability b) Government expenditure
c) Inflation d) Political finance and Standard of public morality

Ans : a

89. The basic objective of all production activity is to
a) provide employment b) make profits c) satisfy human wants d) increase physical output

Ans : c

90. Generally, higher rate of economic development can be achieved by:
a) increasing the number of entrepreneurs b) increasing the rate of capital formation
c) enlarging the size of the market d) increasing the supply of money in the economy

Ans : b

91. The National Social Assistance Programme includes
1. National Old Age Pension Scheme 2. National Family Benefit Scheme 3. Integrated Child Development Scheme 4. National Maternity Benefit Scheme
a) 1 and 2 b) 1,2 and 4 c) 1, 2, 3 and 4 d) 1,3 and 4

Ans : b

92. The New Agricultural Strategy called the Green Revolution was initiated in
a) 1969 b) 1965 c) 1959 d) 1972

Ans : b

93. In a developed economy, the major share of employment originates in the
a) Primary Sector b) Tertiary Sector c) Secondary sector d) Export Sector

Ans : c

94. According to the New Population Policy (2000). India’s Population would stabilise by the year
a) 2016 b) 2055 c) 2045 d) 2031

Ans : c

95. Lorenz Curve is used to measure
a) ratio of direct tax to total tax in India
b) the tax burden on the people
c) inequalities of income/wealth in a society
d) relationship between tax rates and tax revenue

Ans : C





96. Which of the following come under Non-Plan expenditure
1. Subsidies 2. Interest Payments 3.Defence Expenditure
4. Maintenance expenditure for the infrastructure created in the previous plans
a) 1 and 2 b) 1and 3 c) 2 and 4 d) 1,2 3 and 4

Ans : d

97. ‘Food, Work and Productivity’ were the three basic priorities of
a) 6th Plan b) 7th plan c) 5th plan d) 3rd plan

Ans : b

98. The major portion of cultivable land in India is under
a) Food crops b) Plantation crops c) oilseeds d) cash crops

Ans : a

99. The Economist who coined the term ‘Hindu Rate of Growth’ was
a) Gunnar myrdal b) Brahmananda c) Raj Krishna d) I.G. Patel

Ans : c

100. Which of the following political economists suggested that late marriages should be encouraged to limit population?
a) Karl Marx b) T.R. MAlthus c) I.S. Mill d) H. Laski

Ans : b

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