1.  Fixed Foreign Exchange Rate can be changed by

a

  Ministry of Finance

b

 RBI

c

 FIPB

d

 SEBI

Answer & Explanation
Answer : Option A
Explanation :
The Reserve Bank of India has the responsibility of maintaining fixed exchange rates with all other member countries of the International Monetary Fund. Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act as the custodian of India's reserve of international currencies. It operates the exchange control system.

2.  What situation would result if Government expenditure exceeds the Government revenue on Current Account?

a

  Zero-based budgeting

b

 Performance-based budgeting

c

 Deficit budgeting

d

 Surplus budgeting

Answer & Explanation
Answer : Option C
Explanation :
The excess of overall government expenditure both on capital and current account over the estimated government receipts both from tax and non-tax sources is termed as fiscal deficit. Fiscal deficit is a kind of budget deficit where government expenditure exceeds over its income during the course of a financial year.

3.  In Centre-State financial relations in India, Gadgil Formula is used in

a

  division of tax revenue

b

 allocating Central Plan assistance between States

c

 formulating the policy for fresh borrowings

d

 writing off States' indebtedness to the Centre

Answer & Explanation
Answer : Option A
Explanation :
The Gadgil formula was evolved in 1969 for determining the allocation of central assistance for state plans in India. It was adopted for distribution of plan assistance during Fourth and Fifth Five Year Plans. It was named after the then deputy chairman of the Planning Commission Dr. D R Gadgil.

4.  Which Bank was merged in the Punjab National Bank in February, 2003 ?

a

  Nedungadi Bank Ltd.

b

 Nainital Bank Ltd.

c

 Madurai Bank Ltd.

d

 Catholic Syrian Bank Ltd.

Answer & Explanation
Answer : Option A
Explanation :
In February 2003, the Punjab National Bank took over Nedungadi Bank, the oldest private sector bank in Kerala. At the time of the merger with PNB, Nedungadi Bank's shares had zero value, with the result that its shareholders received no payment for their shares. It was first private sector commercial bank to be set up in South India. The bank was incorporated in 1913 and in 1965 it took over selected assets and liabilities of the Coimbatore National Bank Ltd. NOTE : On 15 February 2017, the Union Cabinet approved the merger of 5 associate banks with SBI. Finally, the five associate banks, along with Bharatiya Mahila Bank, merged with SBI on 31 March 2017. With effect from April 1, 2017; all the branches of Associates Banks viz State Bank of Patiala, State Bank of Hyderabad, State Bank of Bikaner & Jaipur, State Bank of Mysore and State Bank of Travancore, will function as branches of STATE BANK OF INDIA (SBI). On 7 October 2014, Arundhati Bhattacharya became the first woman to be appointed Chairman of the bank. She is serving as present chairman of SBI.

5.  The 'break-even' point is where

a

  total revenue equals total cost

b

 None of the above

c

 marginal revenue equals marginal cost

d

 average revenue equals average cost

Answer & Explanation
Answer : Option A
Explanation :
Break-even is the point of balance between making either a profit or a loss. In economics & business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal:there is no net loss or gain, and one has 'broken even'. A profit or a loss has not been made, although opportunity costs have been 'paid', and capital has received the risk-adjusted, expected return.

6.  What is the name of portal launched by RBI recently to check illegal money collection?

a

  Sampark

b

 Sahyog

c

 Sachet

d

 Sahayata

Answer & Explanation
Answer : Option C
Explanation :
The Reserve Bank of India (RBI), in August 2016, launched the Sachet portal to curb illegal collection of money by companies. This website will enable public to obtain information regarding entities who accept deposits, lodge complaints and also share information regarding illegal acceptance of deposits.

7.  'Law of demand' implies that when there is excess demand for a commodity, then

a

  price of the commodity falls

b

 price of the commodity rises

c

 quantity demanded of the commodity falls

d

 price of the commodity remains same

Answer & Explanation
Answer : Option B
Explanation :
The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good. When there is excess demand of the commodity the price starts rising and it continues to rise till equilibrium price is reached.

8.  HRIDAY scheme launched by Urban Development Ministry aims at

a

  Urban sewage treatment

b

 Development of smart cities

c

 Education of girl child

d

 Development of heritage sites

Answer & Explanation
Answer : Option D
Explanation :
National Heritage City Development and Augmentation Yojana (HRIDAY) was launched on 21 January 2015 with the aim of bringing together urban planning, economic growth and heritage conservation in an inclusive manner to preserve the heritage character of each Heritage City. The Scheme shall support development of core heritage infrastructure projects for heritage assets such as monuments, Ghats, temples etc. along with reviving certain intangible assets.

9.  The theory of distribution relates to which of the following?

a

  Equality in the distribution of the income and wealth

b

 The distribution of income

c

 The distribution of factor payments

d

 The distribution of assets

Answer & Explanation
Answer : Option A
Explanation :
In economics, distribution theory is the systematic attempt to account for the sharing of the national income among the owners of the factors of production- land, labour, and capital. Traditionally, economists have studied how the costs of these factors and the size of their return-rent, wages, and profits- are fixed. The theory of distribution involves three distinguishable sets of questions. First, how is the national income distributed among persons? Second, what determines the prices of the factors of production? Third, how is the national income distributed proportionally among the factors of production?

10.  Which from the following is not true when the interest rate in the economy goes up ?

a

  Savings increases

b

 Return on capital increases

c

 Cost of production increases

d

 Lending decreases

Answer & Explanation
Answer : Option B
Explanation :
Interest rates are the main determinant of investment on a macroeconomic scale. The current thought is that if interest rates increase across the board, then investment decreases, causing a fall in nationalincome. However, the Austrian School of Economics sees higher rates as leading to greater investment in order to earn the interest to pay the depositors. Higher rates encourage more saving and thus more investment and thus more jobs to increase production to increase profits. Higher rates also discourage economically unproductive lending such as consumer credit and mortgage lending.

11.  Scheduled bank is a bank which is

a

  Based in foreign Country

b

 Nationalised

c

 Included in the second schedule of RBI

d

 Not Nationalised

Answer & Explanation
Answer : Option C
Explanation :
A scheduled bank, in India, refers to a bank which is listed in the 2ndSchedule of the Reserve Bank of India Act, 1934. Banks not under this Schedule are called non-scheduled banks. Scheduled banks are usually private, foreign, and nationalized banks operating in India.

12.  The number of Nationalised Banks in India is

a

  22

b

 20

c

 14

d

 21

Answer & Explanation
Answer : Option B
Explanation :
On July 19, 1969, 14 commercial banks were nationalized, which got presidential approval on August 9, 1969. In 1980, in order to provide government more power and command over credit delivery, six more commercial banks in India were nationalized. If the associate banks of State Bank of India are counted, then the number goes to 27.

13.  Which one is not the main objective of fiscal policy in India?

a

  To increase liquidity in the economy

b

 To promote price stability

c

 To minimize the inequalities of income & wealth

d

 To promote employment opportunity

Answer & Explanation
Answer : Option A
Explanation :
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is used to stabilize the economy over the course of the business cycle. Fiscal policy is the sister strategy to monetary policy through which a central bank influences a nation's money supply.

14.  The Annapurna Scheme was implemented in the year

a

  1998

b

 1999

c

 2000

d

 1996

Answer & Explanation
Answer : Option C
Explanation :
The Annapurna Scheme was launched by the Ministry of Rural Development on April 1, 2000 as a 100 per cent Centrally Sponsored Scheme aiming at providing food security to meet the requirement of those destitute senior citizens who though eligible have remained uncovered under the National Old Age Pension Scheme (NOAPS). From 2002-2003, this scheme was transferred to State Plan along with the NSAP. Indigent senior citizens or 65 years of age or above who though eligible for old age pension under the National Old Age Pension Scheme (NOAPS) but were not getting the pension were covered under the Scheme. 10 kgs of foodgrains per person per month was supplied free of cost under the scheme.

15.  Operating Surplus arises in the

a

  Production for self-consumption

b

 Enterprise Sector

c

 Government Sector

d

 Subsistence farming

Answer & Explanation
Answer : Option C
Explanation :
Operating surplus is an accounting concept used in national accounts statistics (such as United Nations System of National Accounts (UNSNA) and in corporate and government accounts. It is the balancing item of the Generation of Income Account in the UNSNA. It may be used in macroeconomics as a proxy for total pre-tax profit income, although entrepreneurial income may provide a better measure of business profits. In UNSNA,'implicit (imputed) rents' on land owned by the enterprise and the 'implicit (imputed) interest' chargeable on the use of the enterprise's own funds are excluded from operating surplus.

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