QN1: Banking sector will fall under which of the following sectors?
a) Agricultural sector
b) Service sector
c) Manufacturing sector
d) Industrial sector
Ans: b) Service sectorAnswer
QN2: In which production India has attained self-sufficiency?
a) Fertilizers
b) Edible oil
c) Petroleum
d) Foodgrains
Ans: d) FoodgrainsAnswer
QN3: The main watchdog of international trade is –
a) IMF
b) World Bank
c) WTO
d) UNCTAD
Ans: a) IMFAnswer
QN4: Find the odd one out-Options
a) IOCL
b) HPCL
c) ONGC Ltd.
d) ESSAR OIL
Ans: d) ESSAR OILAnswer
QN5: National Income estimates in India is prepared by
a) Planning Commission
b) RBI
c) Finance Ministry
d) C.S.O
Ans: d) C.S.OAnswer
QN6: Who is the Chairman of NDC?
a) Finance Minister
b) Prime Minister
c) Lok Sabha Speaker
d) Minister of Planning
Ans: a) Finance MinisterAnswer
QN7: The Plan Holiday refers to the period-Options
a) 1965-68
b) 1966-69
c) 1967-70
d) 1978-80
Ans: b) 1966-69Answer
QN8: Which of the following regulates the working of stock markets in India?
a) FEMA
b) RBI
c) SEBI
d) Ministry of Finance
Ans: c) SEBIAnswer
QN9: The New Economic Policy launched in 1991 consist of-
(i) Stabilization policy
(ii) Import control policy
(iii) Deficit financing
(iv) Structural adjustment policy Options
i. only
i, iii. and iv.
ii. and iv.
i. and iv
Ans: i, iii. and iv.Answer
QN10: Closed economy’ is one in which-
a) Only export takes place
b) Neither exports nor imports take place
c) Money supply is fully controlled
d) Exchange rates are under a full control of the government
Ans: b) Neither exports nor imports take placeAnswer
QN11: Mixed economy means-Options
a) Co-existence of small and large industries
b) Promoting both agriculture and industries in the economy
c) Co-existence rich and poor
d) Co-existence of public and private sectors
Ans: d) Co-existence of public and private sectorsAnswer
QN12: The largest share in India’s national income is from-
a) Service sector
b) Agriculture sector
c) Manufacturing sector
d) Trade sector
Ans: a) Service sectorAnswer
QN13: VAT is imposed-
a) Directly on consumer
b) On final stage of production
c) On first stage of production
d) On all stages of production up to the final sale
Ans: d) On all stages of production up to the final saleAnswer
QN14: Which of the following countries per capita income is the highest?
a) India
b) Bangladesh
c) Thailand
d) Pakistan
Ans: c) ThailandAnswer
QN15: India is not a member of-
a) G-15
b) ASEAN
c) UNO
d) ILO
Ans: b) ASEANAnswer
QN16: Black money in India
a) Raises domestic prices
b) Encourages lavish consumption
c) Causes loss of revenue to the exchequer
d) Effects all of the above
Ans: d) Effects all of the aboveAnswer
QN17: Stagflation means
a) Inflation with recession
b) Recession and stagnation
c) Inflation galloping like a stag
d) Inflation and increasing output
Ans: a) Inflation with recessionAnswer
QN18: The President of India is elected by-
a) Parliament (i.e. both the Lok Sabha and the Rajya Sabha]
b) By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.
c) Together by the Central and the State governments
d) By the people directly
Ans: b) By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.Answer
QN19: Which of the following is not a fundamental right enshrined in the Indian Constitution?
a) Right to freedom of religion
b) Right to equality
c) Right to equal pay for equal work for men as well as women
d) Right to freedom of thought and expression
Ans: c) Right to equal pay for equal work for men as well as womenAnswer
QN20: India has-
a) Parliamentary form of government
b) Presidential form of government
c) Both parliamentary and presidential form of government
d) None of these
Ans: a) Parliamentary form of governmentAnswer
QN21: Income tax is an item of-
a) Concurrent List
b) State list
c) Union List
d) Residuary List
Ans: c) Union ListAnswer
QN22: The objective of case-study is-
a) Remedial
b) Diagnostic
c) Educational
d) All of the above
Ans: c) EducationalAnswer
QN23: Inflation, in theory occurs-
a) When prices of essential commodities outstrip income
b) When money supply grows at a higher rate than GDP in real terms
c) When exchange rate of domestic currency falls in foreign exchange markets
d) When fiscal deficit exceeds balance of payments deficit.
Ans: b) When money supply grows at a higher rate than GDP in real termsAnswer
QN24: Among the supply side measures to control inflation is-
a) Curtailing public expenditure
b) Mopping up excess liquidity through taxation
c) Credit control measures of RBI
d) Maintaining price levels through ‘administered price mechanism’ and ‘effective PDS’
Ans: d) Maintaining price levels through ‘administered price mechanism’ and ‘effective PDS’Answer
QN25: ‘Level playing field’ argument of industries requires-
a) MNCs to be stopped from investing in India
b) Licence to MNCs be given only in environment-friendly technologies
c) MNCs to be treated at par with the domestic industry
d) Domestic industry to be given preference over MNCs.
Ans: d) Domestic industry to be given preference over MNCs.Answer
QN26: In a flexible exchange-rate system, an increase in the domestic interest rate would tend to-
a) Improve the current account and worsen the capital account
b) Improve the capital account and worsen the current account.
c) Improve both the current and the capital accounts.
d) Worsen both the accounts.
Ans: c) Improve both the current and the capital accounts.Answer
QN27: Which of the following items is not included in a country’s balance of payments?
a) Shipping services
b) Interest received from abroad
c) Import and export duties
d) Tourists’ expenditure
Ans: c) Import and export dutiesAnswer
QN28: Which two of the following are the most likely effects of the imposition of a tariff on an imported good?
(a) The domestic price of the imported good will fall
(b) Overseas production of the good may be stimulated
(c) Overseas employment will rise
(d) The domestic price of the imported good will rise
(e) Gain of tax revenue by the government
[c] and [d]
[a] and [c]
[d] and [e]
[b] and [d]
Ans: [d] and [e]Answer
QN29: Which two of the following are regarded as the main aims of the World Trade Organisation (WTO)?
a) To eliminate discrimination in world trade
b) To provide financial assistance to countries with debt
c) To reduce tariff barriers
d) To make ‘infant industry’ protection illegal
e) To help give preferences to smaller economies Options
[b) and (d]
[a] and (c]
[d) and (e]
[b) and (d]
Ans: [a] and (c]Answer
QN30: Which of the following is the most integrated form of regional economic arrangement?
a) Customs union
b) Economic union
c) Free trade area
d) Multilateral trading area
Ans: B) Economic union. Note: Common markets is one more exampleAnswer
QN31: Which two of the following arguments are most likely to be used to justify protectionism?
a) To protect high cost domestic industries
b) To protect strategically important industries
c) To protect industries which are still immature
d) To maximise government tax revenue
e) To protect environmental standards
d) and e]
a) and b]
c) and d]
b) and c]
Ans: b) and c]Answer
QN32: A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.
a) The excessive invoicing principle
b) The intra-regional principle
c) The trade diversion principle
d) The most favoured nation principle
Ans: d) The most favoured nation principleAnswer
QN33: A situation where a country exports a product at a price below its cost of production.
a) Full cost pricing
b) New protectionism
c) Dumping
d) Price skimming
Ans: c) DumpingAnswer
QN34: A protectionist measure whereby members of a regional trading bloc agree to impose an identical rate of protection on all goods imported from non-member countries.
a) Common quota arrangements
b) Technological standards control
c) Non-tariff agreement
d) VER agreements
Ans: a) Common quota arrangementsAnswer
QN35: An MNC (multinational company or corporation) can be denned as a firm which:
a) Is beyond the control of any government.
b) Is one of the largest 200 firms in the world?
c) Operates directly or owns subsidiaries in more than one country
d) All of the above
Ans: c) Operates directly or owns subsidiaries in more than one countryAnswer
QN36: Coca Cola is a good example of a _______MNC (Multinational Corporation).
a) conglomerate
b) free-standing
c) vertically integrated
d) horizontally integrated
Ans: c) vertically integratedAnswer
QN37: MNCs are in a good position to vary their strategies in different phases of the product life cycle. For instance in the.. phase(s) they will usually
a) decline, maintain high prices
b) launch, move production to low-cost countries
c) growth and maturity, move production to low-cost countries
d) growth, maintain high prices
Ans: c) growth and maturity, move production to low-cost countriesAnswer
QN38: Which of the following is NOT likely to be a benefit that host countries will obtain from MNCs?
a) Technology transfer
b) Import substitution
c) The ability to impose high tax rates on them
d) Job creation
Ans: c) The ability to impose high tax rates on themAnswer
QN39: When MNCs reduce their tax bill in different host countries this is usually done by a technique called:
a) Technology transfer.
b) Transfer pricing.
c) Import substitution.
d) Product switching.
Ans: d) Product switching.Answer
QN40: Which of the following can be a disadvantage to the host country of MNC investment:
a) Drives out domestic competitors
b) Sends profits abroad
c) Threatens to leave if not “helped”.
d) Imports components
Ans: a) Drives out domestic competitorsAnswer
