New Microsoft Office Word Document

Correct answers are shown in green. Attempted answers, if wrong, are in red.
"No single commodity will give us correct picture of the general price
increase in the economy. So, we must create a ______ by taking into
account either all the commodities in the economy or a basket of
sufficiently large number of commodities that broadly represent the
economy. " [ 1 Mark ]
(a) deflation index
Q1
(b) stock price index

(c) price index
(d) inflation index
(e) I am not attempting the question
Demand-pull inflation simply means that aggregate demand has been
_______ above what the economy is capable of producing in the short
run. [ 3 Marks ]
(a) pushed'
Q2
(b) ?pulled?
(c) transcended'
(d) shot'
The essence of ________ is to explore ways to optimize the use of
scare resources and to organize the society in a way that leads to the
most efficient use of those resources. [ 1 Mark ]
(a) Maths
Q3
(b) History
(c) Economics
(d) Geography
Commercial banks through their fractional reserve system also help

create _____ in the economy. [ 2 Marks ]
(a) buffer
Q4
(b) money
(c) liquidity
(d) positivity
_____ are sales and purchases of government securities or bonds. [ 2
Marks ]
(a) IMOs
Q5
(b) SMOs
(c) OMOs
(d) LMOs
"By taxing the income of the rich at a much higher rate than the
income of the poor, the government attempts to reduce income
inequality." [ 1 Mark ]
Q6
(a) TRUE
(b) FALSE
(c) I am not attempting the question
Q7 "________ expenditure involves routine government expenditure,

which does not create any asset for the government. " [ 3 Marks ]
(a) Recurring
(b) Capital
(c) Depreciation
(d) Revenue
_______ is a measure of the extent to which the creation of money in
the banking system causes the growth in the money supply to exceed
growth in the monetary base. [ 2 Marks ]
(a) Cash multiplier
Q8
(b) Money multiplier

(c) FINANCE multiplier
(d) Income multiplier
"The ______ revenue of the Union Government includes administrative
receipts, net contribution of public sector undertakings including
railways, posts, currency and mint and other revenues." [ 2 Marks ]
Q9
(a) tax
(b) non-tax
Household savings is composed of both _______ and _______ savings.
[ 3 Marks ]
(a) "real, financial"
Q1
0
(b) "financial, physical"

(c) "cash, real"
(d) "liquid, physical"
Q1 Capital goods tend to have a ______ lifetime. [ 2 Marks ]
(a) finite
1
(b) infinite
"While _______ price inflation is more popular in India, the Consumer
Price Index is a popular measure in developed nations like USA, UK. "
[ 3 Marks ]
(a) food
Q1
2
(b) consumer
(c) market
(d) WHOLESALE
_______ typically refers to the use of borrowed funds to increase
returns on any given investment. [ 2 Marks ]
(a) """Float"""
Q1
3
(b) """Deleverage"""
(c) """Margins"""
(d) ?Leverage?
Q1 ______ implies adjusted for inflation. [ 1 Mark ]

4
(a) """Positive"""
(b) """Unreal"""
(c) ?Real?
(d) """Negative"""

"__________ tells us about what determines level of output in an
economy, how are employment and prices determined; how money
supply affects rate of interest" [ 2 Marks ]
Q1
5
(a) Macroeconomics
(b) Microeconomics
The insurance sector regulator in India is the ______. [ 2 Marks ]
(a) IRDA
Q1
6
(b) FMC
(c) SEBI
(d) RBI
Every business enterprise involves _____. [ 1 Mark ]
(a) risk
Q1
7
(b) assured profits

(c) sure losses
(d) windfall gains
Q1 FDI stands for ______. [ 2 Marks ]

8
(a) Foreign Derived Income
(b) Foreign direct investment
(c) Foreign Derivatives Investment
(d) Foreign Disposable Investment

______ is a comprehensive measure of a country's overall economic
output. [ 1 Mark ]
(a) GDP
Q1
9
(b) ADP
(c) MDP
(d) LDP
____ is conventionally thought of in terms of branch plant or subsidiary
company operations that are controlled by parent companies based in
another country. [ 2 Marks ]
(a) FDI
Q2
0
(b) FPI
(c) ECB
(d) ECP
Q2 The Inflation at any given time is measured by computing the

1 percentage changes in the _______ at that point of time over the
index prevailing one year previously. [ 1 Mark ]
(a) price index
(c) deflation index
(d) inflation index

Using GDP estimates at ______ prices helps us eliminate the effects of
price level changes on the GDP. [ 1 Mark ]
(a) minimum
Q2
2
(b) fluctuating
(c) maximum
(d) constant
______ analyzes and studies decisions of individual economic agents
and how they interact in specific markets and allocate their limited
resources to optimize their own wellbeing. [ 2 Marks ]
Q2
3
(a) Macroeconomics
(b) Microeconomics
The overall _______ for a country in a given year is the sum of the
surplus/ deficits of current and capital accounts. [ 2 Marks ]
(a) Balance on revenue account
Q2
4
(b) Balance on capital account

(c) Balance of Payments
(d) Balance of recurring account
Q2 Share capital is a source of funds for commercial banks. [ 1 Mark ]

5
(a) TRUE
(b) FALSE

"Under the Banking Regulation Act, 1949, the RBI has been vested with
extensive powers of supervision and control over banks." [ 1 Mark ]
Q2
6
(a) TRUE
(b) FALSE
Usages of commodities as the medium of exchange in the early days
and measure of value correspond to what we presently call ______.
[ 1 Mark ]
(a) Cash'
Q2
7
(b) Exchange'
(c) ?Money?
(d) Coins'
_____ is the rate at which the central bank offers refinance to the
commercial banks. [ 3 Marks ]
(a) Level rate
Q2
8
(b) Interest rate

(c) Duration
(d) Bank rate
Q2 The issuer of Currency in India is the ________. [ 2 Marks ]

9
(a) IRDA
(b) SEBI
(c) FMC
(d) RBI
The Forward Markets Commission (FMC) regulates ______ markets. [ 2
Marks ]
(a) equity
Q3
0
(b) cash
(c) finance
(d) commodities
"A _____ refers to a situation when an unusually large number of
depositors rush in to withdraw their deposits, fearing that the bank
may fail." [ 2 Marks ]
(a) bank run
Q3
1
(b) bank fall

(c) bank slowdown
(d) bank implosion
Q3 "Labour, capital and land are considered to be __________. " [ 2

2 Marks ]
(a) ?factors of production?
(b) ?factors of products?
(c) ?factors of productivity?
(d) ?factors of produce?

Governments raise resources mostly using ______. [ 1 Mark ]
(a) incentives
Q3
3
(b) coersion
(c) dictats
(d) taxes
"In economics, the resources which are used to produce goods and
services are called _______. " [ 2 Marks ]
(a) ?factors of products?
Q3
4
(b) ?factors of production?

(c) ?factors of productivity?
(d) ?factors of produce?
A well functioning legal and a stable political system is essential for
markets to operate efficiently. [ 1 Mark ]
Q3
5
(a) FALSE
(b) TRUE
Q3 "When interest rates go down, prices of fixed interest bonds ?" [ 2

6 Marks ]
(a) Remain unchanged
(b) Go down
(c) Go up
(d) I am not attempting the question
One of the important characteristics of the financial markets is that it
is a source of _______. [ 1 Mark ]
(a) zero risk
Q3
7
(b) systemic risk

(c) known risk
(d) absolute risk
A ______ system will only work only if two persons can be found whose
disposable possessions mutually suit each other's wants. [ 1 Mark ]
(a) payout
Q3
8
(b) trade
(c) transfer
(d) barter
"While wheat becomes an ingredient for producing the bread, the oven
is only a tool to produce it. Such goods are called _____ Goods." [ 2
Marks ]
(a) Producing
Q3
9
(b) Revenue
(c) Production
(d) Capital
M1 + saving deposits with Post office savings banks = [ 1 Mark ]

(a) M5
Q4
0
(b) M3
(c) M4
(d) M2
_______ are instruments used by foreign investors not registered with
the Indian regulators for taking an exposure in the domestic market. [
3 Marks ]
(a) International Notes (INs)
Q4
1
(b) Participatory notes (PNs)

(c) Credit Notes (CNs)
(d) Promissory Notes (PNs)
_______ receipts include tax and non-tax revenue received by the
government. [ 1 Mark ]
(a) Fiscal
Q4
2
(b) Revenue
(c) Internal
(d) External
Q4 _______means that the country is buying goods and services that have
3 been produced abroad. [ 1 Mark ]
(a) Exporting
(b) Importing
The ________ is measured at regular intervals and changes in the
index are an indicator of the average price movement of a fixed
basket of goods and services (that represent the entire economy). [ 1
Mark ]
(a) inflation index
Q4
4

(c) deflation index
(d) price index
"There have however been exceptions, when there have been
sustained decline in the price level of goods and services. This
phenomenon is called ______. " [ 1 Mark ]
(a) counter inflation
Q4
5
(b) inflation
(c) hyper-inflation
(d) deflation
Q4 M1 + time deposits with the banking system = [ 1 Mark ]

6
(a) M3
(b) M2
(c) M1
(d) M4

"When a country sells its domestically produced goods and services
abroad, the country is said to be ______. " [ 1 Mark ]
Q4
7
(a) ?exporting?
(b) importing'
The financial market for securities with maturities of less than one
year is known as _______. [ 1 Mark ]
(a) derivatives market
Q4
8
(b) cash market

(c) money market
(d) Rupee market
A country is said to be running a positive trade balance when its
exports ______ its imports. [ 1 Mark ]
Q4
9
(a) exceed
(b) is less than
Q5 "To know whether there has been a genuine increase in economic

0 activity and by how much, GDP measures need to be taken at _____
prices (that is, the price level of a particular year). " [ 1 Mark ]
(a) maximum
(b) fluctuating
(c) constant
(d) minimum
The wholesale price inflation is also called the ______ inflation [ 2
Marks ]
(a) advanced
Q5
1
(b) basic
(c) headline
(d) timeline
Inflation is the _____ of price increase. [ 2 Marks ]
(a) difference
Q5
2
(b) rate
(c) sum
(d) dispersion
"Trade among developed countries could not be explained by absolute
advantage. To explain this, David Ricardo propounded the law of
_______." [ 1 Mark ]
(a) recovarable advantage
Q5
3
(b) relative advantage

(c) theoritical advantage
(d) comparitive advantage
Q5 "_______ directly adds to production capacity in the host country and,
other things remaining the same, contributes to capital formation and

employment generation in the host country." [ 2 Marks ]
(a) Greenfield ECP
4
(b) Greenfield FPI

(c) Greenfield ECB
(d) Greenfield FDI
A paper currency note does not have any intrinsic value or value of its
own. Such type of money is called ______. [ 2 Marks ]
(a) """cash money"""
Q5
5
(b) """flat money"""

(c) ?fiat money?
(d) "real money"""
"Resources are scarce, while human wants are _______. " [ 1 Mark ]
Q5
6
(a) unlimited
(b) limited
Q5 _______ expenditure results in creation of assets in the economy. [ 3

7 Marks ]
(a) Depreciation
(b) Revenue
(c) Capital
(d) Recurring
"The Reserve Bank of India was established on April 1, 1935 under the
_______, which was passed in the year 1934. " [ 1 Mark ]
(a) Reserve Bank of India Act
Q5
8
(b) Bank of India Act

(c) FINANCE Act
(d) Banking Regulator Act
The ________ measures economic activity by adding all the incomes
received by all the producers of output. [ 3 Marks ]
Q5
9
(a) expenditure approach'

(b) ?income approach?
Gift tax is an example of ______. [ 2 Marks ]
Q6
0
(a) Direct tax

(b) Indirect tax

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Correct answers are shown in green. Attempted answers, if wrong, are in red.

(b) stock price index

Commercial banks through their fractional reserve system also help

Q7 "________ expenditure involves routine government expenditure,

(b) Money multiplier

(b) "financial, physical"

Q1 Capital goods tend to have a ______ lifetime. [ 2 Marks ]

Q1 ______ implies adjusted for inflation. [ 1 Mark ]

(e) I am not attempting the question

(b) assured profits

Q1 FDI stands for ______. [ 2 Marks ]

(d) Foreign Disposable Investment

Q2 The Inflation at any given time is measured by computing the

(e) I am not attempting the question

(b) Balance on capital account

Q2 Share capital is a source of funds for commercial banks. [ 1 Mark ]

(c) I am not attempting the question

(b) Interest rate

Q2 The issuer of Currency in India is the ________. [ 2 Marks ]

(b) bank fall

Q3 "Labour, capital and land are considered to be __________. " [ 2

(e) I am not attempting the question

(b) ?factors of production?

Q3 "When interest rates go down, prices of fixed interest bonds ?" [ 2

(b) systemic risk

M1 + saving deposits with Post office savings banks = [ 1 Mark ]

(b) Participatory notes (PNs)

(b) stock price index

Q4 M1 + time deposits with the banking system = [ 1 Mark ]

(e) I am not attempting the question

(b) cash market

Q5 "To know whether there has been a genuine increase in economic

(b) relative advantage

Q5 "_______ directly adds to production capacity in the host country and,

other things remaining the same, contributes to capital formation and

(b) Greenfield FPI

(b) """flat money"""

Q5 _______ expenditure results in creation of assets in the economy. [ 3

(b) Bank of India Act

(a) expenditure approach'

(a) Direct tax

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