Practice Test

Q1) Among the tax revenues of the union government, the most important source is : Show Answer

Q2) Direct taxation is a better from of taxation because : Show Answer

Q3) India's Tax effort measured as tax to GDP ratio is a present around Show Answer

Q4) Chelliah Committee (1992-93) recommended that in Income Tax there should be: Show Answer

Q5) Who among the following is the Chairperson of the 13th Finance Commission Show Answer

Q6) National Security Depository Limited (NSDL) deals with : Show Answer

Q7) A country, which has successfully introduced financial discipline through a Fiscal Responsibility Act, is Show Answer

Q8) Which of the following committees recommended Capital Account Convertibility ? Show Answer

Q9) The fasted increasing Component of the Central Government expenditure is Show Answer

Q10) Which of the following is not one of the deficit financing methods in India ? Show Answer

Q11) Which of the following is the largest single sources of the Government's earning from tax revenue?
Show Answer

Q12) Which one of the following taxes is not shared by the central government with the state? Show Answer

Q13) Consider the following statements in relation to the national Investment fund (NIF) 2006:
Show Answer

Q14) The roadmap for the abolition of Central Sales Tax and introduction of a Goods and services Tax(GST) indicates a time limit of : Show Answer

Q15) Economists explain that Indian need to increase its rate of saving from the present 21 percent. An obstacle to this is: Show Answer

Q16) Consider the following statement with regard to planning Commission (PC) and Finance Commission (FC). Which of these statement is not true? Show Answer

Q17) In India, monetisation of the fiscal deficit is achieved through: Show Answer

Q18) The spread of black money is a major threat to the economic stability of the country. Among the following which may nor be a reason for the spread of black money? Show Answer

Q19) The process of budget making after re-evaluating every item of expenditure in every financial year is known as - Show Answer

Q20) States earn maximum revenue through Show Answer

Q21) Which of the following does not part of the capital receipts of the Union Government ? Show Answer

Q22) Which of the following is not viewed as a national debt ? Show Answer

Q23) Which of the following is not one of the objectives of the Banking Cash Transaction Tax(BCTT) introduced from 1 June 2005? Show Answer

Q24) Which of the following has become the first Regional Rural Bank issuing debit card in the country ? Show Answer

Q25) Tarapore Committee submitted its report on "Full Convertibility on Rupee" in - Show Answer

Q26) CENVAT is related to - Show Answer

Q27) The newly launched CPI-based inflation for January 2012 on point to point basis is 7.65%. This inflation has the base year Show Answer

Q28) How many percentage of union government's expenditure has been allocated to defence for the year 2012-13? Show Answer

Q29) VAT is imposed - Show Answer

Q30) The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to - Show Answer

Q31) The base year of present Consumer Price Index (CPI) for Urban Non-Manual Employees (CPI-UNME) is Show Answer

Q32) Which of the following does not grant any tax rebate ? Show Answer

Q33) The 'Ad hoc Treasury Bill System ' of meeting budget deficit in India was replaced by 'Ways of Means Advances System' which has come into force on - Show Answer

Q34) The recommendations of the 13th Finance Commission has become operation for the period Show Answer

Q35) Which is the latest mode for payment of income tax dues to the government Show Answer

Q36) The cause of deflation is- Show Answer

Q37) 12th Finance Commission had recommended to merge and determine one single interest rate on various outstanding central loans to states having different interest rates. What is this recommended interest rate? Show Answer

Q38) Interest Rate Policy is a part of - Show Answer

Q39) The number of approved share markets in India - Show Answer

Q40) Plan expenditure in India is met by - Show Answer

Q41) High fiscal deficit is cause for concern for any economy. What does it denote? Show Answer

Q42) Fiscal Deficit means- Show Answer

Q43) Out of total expenditure as shown in regular Budget 2012-13, the maximum share goes to - Show Answer

Q44) The present Vice-Chairman of planning Commission is- Show Answer

Q45) To prevent recurrence of scams in Indian Capital Market, the Government of India has assigned regulatory power to Show Answer

Q46) Variable reserve rates and Open Market Operations are instruments of Show Answer

Q47) All revenues received by the Union Government by way of taxes and other receipts for the conduct of Government business are credited to the ? Show Answer

Q48) With reference to the Finance Commission of India, which of the following statement is correct ? Show Answer

Q49) Which one at the following is responsible for the preparation and presentation of Union Budget to the Parliament ? Show Answer

Q50) In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in last five years? Show Answer

Q51) Which one of the following statements appropriately describes the "Fiscal stimulus"? Show Answer

Q52) _____does not explain the existing savings rate in India? Show Answer

Q53) Highest sector wise contribution to gross domestic saving comes from : Show Answer

Q54) Fiscal deficit means : Show Answer

Q55) Net factor income from abroad if added to GDP gives: Show Answer

Q56) Value-added tax is Show Answer

Q57) System of value added taxation applies to : Show Answer

Q58) States 'debts does not include : Show Answer

Q59) A tax paid by the person on whom the tax falls is called a : Show Answer

Q60) Octroi is levied and collected by Show Answer

Q61) Which one is wrongly matched ? Show Answer

Q62) Which is not a direct tax? Show Answer

Q63) Which is not an indirect tax? Show Answer

Q64) An account given by the government to encourage a specific economic activity is a Show Answer

Q65) All taxes are included in Show Answer

Q66) Investment in public works is Show Answer

Q67) An instrument of qualitative credit control is Show Answer

Q68) Why is general budget presented at 5pm in the evening? Show Answer

Q69) Budget deficits is : Show Answer

Q70) ________is the main source of revenue of meet government expenditures ? Show Answer

Q71) Taxation and government's expenditure policy are dealt under______policy Show Answer

Q72) Current account in the balance of payment is comprise is_________? Show Answer

Q73) What is/are under the capital account of BoP.? Show Answer

Q74) Fiscal stability means that, other things remaining constant Show Answer

Q75) Which is incorrect about convertibility? Show Answer

Q76) Which currency exchange rate mechanism has been adopted by India ? Show Answer

Q77) ________is not a non-Plan expenditure ? Show Answer

Q78) Capital outlay for defence service have been Show Answer

Q79) Tobin Tax refers to Show Answer

Q80) Which one of the following statements regarding the levying, collecting, and distribution of Income Tax is correct? Show Answer

Q81) One of the important goals of the economic liberalisation policy is to achieve full convertibility of the India rupee. This is being advocated because Show Answer

Q82) A depreciation of a currency occurs when Show Answer

Q83) An appreciation of the currency is likely to occur if Show Answer

Q84) A fall in the external value of a currency Show Answer

Q85) The outcome of devaluation of currency is Show Answer

Q86) The tax which is not shared between the Center and the States is Show Answer

Q87) Which of the following is most likely to occur when the Indian government finances a budget deficit by borrowing from overseas? Show Answer

Q88) If a government budget for a surplus and there is an unexpected increase in the level of economic activity, which of the following is likely to occur? Show Answer

Q89) To prevent the external value of the currency from falling, the government might Show Answer

Q90) To prevent the exchange rate rising the government could Show Answer

Q91) Financial inclusion means provision of Show Answer

Q92) After 1947, development and non-development expenditures have increased, the increase in the former being more.
Non-development expenditure involves
1) interest payments
2) subsidies
3) defence
4) irrigation
Show Answer

Q93) Consider the following functions
1) Issues of bank notes of all denominations.
2) Lender of last resort
3) Underwrite the loans of state and centra governments
4) periodic inspection of commercial banks
Which of the above are functions of the Reserve Bank of India ?
Show Answer

Q94) Consider the following statement in respect of the fiscal Responsibility and Budget Management Act:
1) It lays down limits for revenue deficit and fiscal deficit as a percentage of GDP
2) It applies to both Central and State Governments.
3) It does not permit the Central Government to give guarantees to loans raised by PSUs and State Government beyond 0.5%of GDP.
4) It prescribes an upper limit for the liabilities of the government
Which of these statements are correct ? Show Answer

Q95) Consider the following statement in respect of the Financial Commission :
1) IT is mandatory to appoint a Finance Commission every five years.
2) Finance Commission lays down the principles governing grant-in-aid to states.
3) Finance Minister is the ex-officio Chairperson of the Finance Commission
4) The award given by the Finance Commission in binding on Central and state governments.
Which of the above statements are correct ? Show Answer

Q96) The argument for reduction in the rate of taxation to promote economic activity rates on the following premises :
1) Lower taxes increases the amount of savings.
2) Moderate taxes lead to lower prices
3) It promotes consumption.
4) It increases government's revenue
Show Answer

Q97) Increase in net RBI credit for Central Government represents-
1) Budgetary Deficit
2) Revenue Deficit
3) Fiscal Deficit'
4) Monetised Deficit
Choose the right option Show Answer

Q98) Devaluation means-
1) to reduce the value of home currency
2) to appreciate the value of home currency
3) to issue new currency in place of old currency
4) to withdraw currency from the market
Choose the right option
Show Answer

Q99) Consider the following
1) Market borrowing
2) Treasury bills
3) Special securities issued to RBI
Which of these is/are component(s) of internal debt?
Show Answer

Q100) Consider the following statements
Full convertibility of the rupee may mean
1) its free float with other international currencies.
2) its direct exchange with any other international currency at any prescribed place inside and outside the country
3) it acts just like any other international currency
Which of these statements are correct ?
Show Answer

Q101) Consider the following taxes
1) Corporation tax
2) Customs duty
3) Wealth tax
4) Excise duty
Which of these is/are indirect taxes? Show Answer

Q102) Put the main sources of revenue of the Central Government is ascending order of importance.
1) Income tax
2) Corporate tax
3) Customs
4) Excise duties
Choose your answer from the following codes. Show Answer

Q103) Which of the following statements about indirect taxes in India is/are true?
1) Yield from indirect taxes in much more than that from direct taxes.
2) Indirect taxes have grown faster than direct taxes,since independence.
3) Indirect taxes are ultimately paid for by persons who do not actually pay the taxes to the government
4) Increase in indirect taxes is a welcome feature in a developing country,
Choose your answer from the following Show Answer

Q104) Which of the following comes under non-plan expenditure ?
1) Subsides
2) Interest payments
3) Defence expenditure
4) Maintenance expenditure for the infrastructure created in the previous plans
Show Answer

Q105) With reference to the Indian Public Finance, consider the following statements.
1) External liabilities reported in the Union Budget are based on historical exchange rates.
2) The continued high borrowing has kept the real interest rate high in the economy .
3) The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect on private investments.
4) Interest payments is the single largest component of the non-plan revenue expenditure of the union Governments.
Which of these statements are correct?

Show Answer

Q106) Which of the following are the methods of Parliamentary control over public finance in India?
1) Placing annual Financial Statement before the Parliament
2) Withdrawal of money from Consolidation fund of India only after passing the Appropriation Bill.'
3) Provision of supplementary grants and vote-on account
4) A periodic or at least a mid-year review of programme of the Government against microeconomics forecasts and expenditure by a Parliamentary Budget office
5) Introducing Finance Bill in the Parliament
Select the correct answer using the codes given below : Show Answer

Q107) Which of the following is/are among the noticeable features of the recommendations of the Thirteen Finance Commission?
1) A design for the Goods and Service Tax, and compensation package linked to adherence to the proposed design.
2) A design for the creation of lakhs of jobs in the next ten years in consonance with India,s demographic dividend.
3) Devolution of a specified share of central taxes to local bodies as grants
Select the correct answer using the codes given below Show Answer

Q108) In the context governance, consider the following:
1) Encouraging Foreign Direct Investment inflows
2) Privatization of higher educational Institutions
3) Down-sizing of bureaucracy
4) Selling/offloading the shares of Public Sector Undertakings.
Which of the above can be used as measures to control the fiscal deficit in India ? Show Answer

Q109) Consider the following action by the Government
1) Cutting the tax rates
2) Increasing the government spending.
3) Abolishing the subsidies in the context of economic recession, which of the above actions can be considered a part of the "fiscal stimulus' package Show Answer

Q110) Consider the following action which the government can take
1) Devaluation the domestic currency.
2) Reduction in the export subsidy
3) Adopting suitable polices which attract greater FDI and more funds from FIIs.
Which of the above action/s can help in reducing the current account deficit? Show Answer

Q111) Indian income tax is______
1) direct
2) progressive
3) indirect
4) proportioanal Show Answer

Q112) Which statements about indirect taxes in India are true?
1) Yeild from indirect taxes is more than that from direct taxes
2) Indirect taxes have grow faster than direct taxes after 1947
3) Indirect taxes are ultimately paid for by persons who do not actually pay taxes to the government.
4) Increase in indirect taxes is food in a developing country.
Show Answer

Q113) Budget comprises of (i) revenue budget, and (ii) capital budget, which of the following item or items is/are not covered under the revenue budget
1) Taxes and other duties levied by the government .
2) Interest and dividend on government investments.
3) Expenditure on running of government.
4) Market loans by the government.
Show Answer

Q114) _________are included in the capital budget
1) Borrowing of gold from the RBI
2) Loans f foreign governments
3) Expenditure on roads, buildings and machinery
Loans and advances to the states and Union territories
5) Transaction in the public account
Show Answer

Q115) Which are the pre-requisites required by the Indian economy to implement convertibility of rupee on trade account as suggested by the Raangarajan committee?
1) There should be comfortable foreign exchange resources
2) Low rate of inflation
3) Mechanism by which the government can pass on the change in the price of imported goods to the consumers
4) SLR and CRR must be low. Show Answer

Q116) What is the sequence in which the Indian economy has undergone the process of convertibility?
1) Rupee floated on trade account
2) Part convertibility under a dual exchange rate system
3) Introduction of exim scrips
4) Rupee made convertible on current account Show Answer

Q117) Capital account convertibility warrants
1) Similarity between domestic and external financial market
2) Reduction in fiscal deficit.
3) Establishment of a fixed rate mechanism,
4) Restructuring of domestic financial institutions.
Show Answer

Q118) Zero Based Budgeting (ZBB) lays emphasis on :
1) Unlimited deficit financing
2) Preparing new budget right from scratch
3) Preparing the budget neglecting history of expenditure
4) Tax Reforms
Choose the correct answer based on the above statements
Show Answer

Q119) The countries these are most worried about the currency war. They are arguing about whose actions harmed the world economy the most.
What are the view of the rich countries, particularly USA, In this regard?
1) They feel that it was China who was unwilling to allow the Yuan or rise
2) They feel that it was India who has snatched jobs in most of the European countries and USA . This made the situation more grim
3) Some countries feel that it was Japan who allowed swapping of its currency with nations and created a grim situation in the world market . Show Answer

Q120) The ministry of Finance recently released a comprehensive paper on Govt. debt. Which of the following is/are true about the same?
1) The paper presents the road map for general debt to be raised by the Govt. of India during the period of 2011-2015 which is the period of the award of the 13th Finance Commission
2) As per the estimates the target debt in the terminal year 2014-15 will be lower than whatever recommended by the 13th Finance Commission
3) The paper has recommended that the Govt. should try to generate resources in such a way that It does not have to depend much on debt. The total debt should not be more the 1/3 rd of the total requirements. Show Answer

Q121) Government of India is considering a stimulus package to its citizens called Spending and Tax Cuts, It means
1) If one spends more on some specific item, there is a tax benefit
2) If one spends more some specific item, one has to pay more tax
3) Govt. is planning to bring in more money in its social welfare fund to provide more tax benefits to the general public.


Show Answer

Q122) It is argued that stamp duties levied on deeds and documents should be abolished. Which of the following is the arguments(s) given in favor of the abolition of the stamp duties ?
1) Stamp duties discourage people to take loans, Hence it is against the interest of the banks.
2) Government gets a very minor amount as revenue from stamp duties
3) Most transaction do not fall in the purview of the registration and no stamp duty is required Show Answer

Q123) GOI recently constituted the new Finance Commission (13Th) What are its major functions?
To decide the___________?
1) salary structure of the employees of the Central Govt.
2) Distribution of net proceeds of taxes between states and Central Govt.
3) Rate of Income tax and other taxes collected by the union Govt. Show Answer

Q124) Very frequently RBI revises rates like SLR, CRR and Bank Rate etc. The purpose of such revision is to _______
1) influence demand deposits creating power of commercial banks.
2) control inflation in the economy
3) reduce fee based income of commercial banks Show Answer

Q125) Consider the following statements
The price of any currency in international market is decided by the:
1) World Bank
2) Demand for goods/services provided by the country concerned
3) Stability of the government of the concerned country
4) Economic potential of the country in question of these statement : Show Answer

Q126) What steps has the Govt. of India to successfully avert the negative fallout of the global slowdown on the Indian economy?
1) It has provided focused fiscal stimulus in the form of relief packages to various sectors
2) It has increased expenditure on public projects
3) It has created new employment opportunities and public assets.

Show Answer

Q127) As we all know Ministry of Finance every year prepares Union Budget and Presents it to Parliament. Which of the following is are the element of the Union Budget?
1) Estimates of revenue and capital and capital receipts
2) Way and Means to raise the revenue
3) Estimates of expenditure Show Answer

Q128) Which of the following is/are he objectives(s) of our monetary policy?
1) To anchor inflation exceptions
2) To actively manage liquidity
3) To maintains interest rate regime consistent with price output and financial stability
Show Answer

Q129) The Finance Minister of India in one of his speeches said that "the current high inflation is not because of monetary expansion but due to supply side bottlenecks in certain essential commodities ". This means that Finances essential commodities". This means that the finance Minister is of the view that-
1) The liquidity position in market is quite comfortable these days.
2) inflation being experienced these days is not cost push inflation
3) markets are flooded with luxury goods but essential commodities are definitely in short supply . Show Answer

Q130) Annual financial statement shown the receipts and payments of the government under the 3 parts in which government account are kept :
1) Consolidated Fund
2) Contingency Fund
3) Public Account
Which of the following items are covered under Public Account? Show Answer

Q131) Assertion : Nonperforming Assets (NPA) are a major worry for the Indian banking sector.
Reason : Even in the post-nationalization era, banks have been concentrating on lending to large business houses . Show Answer

Q132) Assertion : Fiscal deficit is greater than budgetary deficit
Reason : Fiscal deficit is the borrowing from the Reserve Bank of India plus other liabilities of the Government to meet its expenditure Show Answer

Q133) Benefits of VAT includes
1) It will reduce the tax evasion
2) Reduces the cascading burden
Which of these statement(s) is/are correct? Show Answer

Q134) The profits from sale of a house property which is earned by an owner is taxed by the Government. What is this form of tax known as? Show Answer

Q135) Which of the following factors is accounted in the calculation of Gross Domestic Product of a country in the expenditure method? Show Answer

Q136) Which of the following measurement taken in the Union Budget for 2013-14 will be helpful in achieving
inclusive growth ?
1) Reducing Fiscal Deficit to 4.8% of GDP by March 2014
2) Starting a women's bank in the public sector.
3) Establishment of Indian Institute of Agriculture Bio-Technology.
4) Increasing taxes on cirgarettes.
Select the correct answer using the codes given below Show Answer

Q137) Consider the following statements
1) The second report of the Kelkar Committee dealing with direct and indirect taxed has maintained
its original recommendation including the abolition of exemptions relating of housing loans.
2) The loans disbursed to farmers under Kisan Credit Card Scheme are covered under Rashtriya
Krishi Beema Yojana of Life Insurance Corporation of India.
Which of the statements given above is/are correct? Show Answer

Q138) Assertion (A) The new Exim Policy is liberal, market-oriented and favours global trade.
Reason (R) GaTT has played a significant role in the liberalisation of the economy
Show Answer

Q139) Consider the following statements
1) Gini coefficient is commonly used to measure the inequality of wealth
2) The Gini coefficient with a value of 1 expressing total equality and a value of 0 expressing maximum
in inequality
Which of the statements given above is/are correct? Show Answer

Q140) Consider the following statements
1) Gini coefficient is the area between the line of perfect equality.
2) Lorenz curve is a percentage of the area between the line of perfect inequality
Which of the statements given above is/are correct? Show Answer

Q141) Which of the following statements are correct with regard to SEBI granding status to MCX-SX to operate as full-fledged stock exchange ?
1) With SEBI's latest decision, MCX-SX is likely to become the third major national level full-fledge stock exchange
2) At present, SEBI has granted permanent recognition to eight stock exchange in the country.
3) Only BSE and NSE are operating as active national level bourses across the segments.
4) MCX Stock Exchange (MCX-SX) was first granted recognition by SEBI in September, 2008, but only in the currency dervaties trade.
Select the correct answer using the codes given below Show Answer

Q142) Foreign Direct Investment (FDI) is investment directly into production in a country by a company
located in another country, then which one of the following modes is correct about the FDI? Show Answer

Q143) Union Government of India granted services tax exemption on the services of life Insurance
Business provided under, which of the following schemes ?
1) Janashree Bima Yojaan
2) Bima Yojana for Handicraft Artisams
3) Swasthya Bima Yojana
4) Aam Aadmi Bima Yojana
5) Jeevan Bima Yojana
Select the correct answer using the codes given below Show Answer

Q144)
Which one of the following is related with the Baltic Dry Index ? Show Answer

Q145)
Which one of the following factors is taken account to calculate the Balance of Payment (BOP) of a
country ? Show Answer

Q146) Consider the following
1) New Broad Money (NM3)
2) New Narrow Money
3) All Deposits with the Post office Savings Bank
4) National Savings Certificates
Which of the components given above is/are correct included in the Liquidity Aggregates (L1) in the
Indian Economy ? Show Answer

Q147) Consider the following measures
1) Repo Rate
2) Cash Revese Requirement
3) Reserve Repo Rate
Which of the measure given above is/are major instrument(s) used in the Liquidity Adjustment Facility
(LAF)? Show Answer

Q148) Which one among the following is correct about the Repo Rate in the Indian Economy ? Show Answer

Q149) Consider the following objectives
1) To restrict the expansion of bank credit.
2) To augment the investment of the banks in Governement Securities.
3) To ensure solvency of banks.
Which of the main objectives given above are the main objectives of the Statutory Liquidity Requirements
(SLRs) ? Show Answer

Q150) Consider the following kinds of credit controls
1) Minimum margin for lending against specific securities
2) Ceiling on the amount of credit for certain purposes.
3) Discrminatory rate of interest charged on certain types of advances.
Which of the credit controls given above are used by RBI as a selective credit control measures ? Show Answer

Q151) Consider the following statements
1) Money Supply measures Mo, M1 and M3 are widely used in India.
2) Money Supply measures M2 and M4 are rarely used in India.
Which of the statements given above is/are correct ? Show Answer

Q152) The upper part of the given graph is a hypothetical movement in the BSE Sensex over a few months and the lower
part is the fluctuation in the average value of automobile shares in the same period (actual values not given)
Which one of the following inferences can be drawn from the graphs ? Show Answer

Q153) Which of the following situations does not result due to the depreciation of the rupee with respect to
foreign currencies ? Show Answer

Q154) MODVAT is different from VAT in the sense that
1) Under MODVAT, tax is levied only on value addition while under VAT, excise is imposed on final value and then rebate is given on inputs.
2) MODVAT is only at the production stage while VAT extends both to production and distribution stage.
3) Under MODVAT, excise is levied on final value and then rebate is given on inputs while under VAT, tax is levied only on value addition
4) MODVAT implies rationalisation of excise duty only while VAT impiles rationalisation of excise sales and turnover taxes etc also.
Which of the statements given above is/are correct ? Show Answer

Q155) When the ratio of indirect taxes to total taxation revenue is very high it leads to
1) rise in the price level.
2) higher taxation burden on the rich.
3) higher taxation burden on the poor.
4) fall in the tax revenues.
Select the correct answer using the codes given below
Show Answer

Q156) banks of India are required to maintain a certain ratio between their risky assets and capital which is known as Show Answer

Q157) Assertion (A) In India, indirect taxes constitute a large share of government revenue
Reason (R) Taxes are essential for development Show Answer

Q158) Which one of the properties can be the properties of the Lorenz Curve ?
1) Lorenz Curve cannot rise above the line of perfect equality.
2) Lorenz Curve cannot sink below the line of perfect inequality.
3) Lorenz Curve is increasing and convex.
Which of the statements given above is/are correct ? Show Answer

Q159) Which of the following was not the reason for the recent slide of Indian Rupee? Show Answer

Q160) Indian Government is planning to introduce GAAR. What is the purpose of GAAR? Show Answer

Q161) Which of the following measures, falls under the category of measures taken by the government to control the fiscal deficit. choose the correct answer from the codes given below:
1. Direct cash transfer.
2. Limiting the number of subsidized cylinders to households.
3. Allowing the corporate to get more money through ECB's (External Commercial Borrowing)
4.Proposal to introduce GST Show Answer

Q162) Consider these policy measures in Indian economy:
1. Disinvestment
2. Policy of Navratnas
3. National Investment Fund
The correct chronological order in which they appeared on the scene is: Show Answer

Q163) Mixed Economy refers to
where agriculture and industry are given equal importance.
where public sector exists along with the private sector.
where globalisation is preferred with heavy dose of swadeshi in national economy.
where Centre and states are equal partners in economic planning and development.
The correct statement(s) is/are made with : Show Answer

Q164) Which of the following three situations are unlikely to coexist under the concept of Impossible Trinity?
1. Fixed Exchange Rate
2. Higher GDP growth rate
3. Independent Fiscal Policy
4. Free Capital Movement
5. Independent Monetary Policy
Select the correct answer from the codes given below: Show Answer

Q165) Consider these statements regarding budget deficit:
This is the excess of a Government's total expenditure over its income.
It has to be met by borrowing.
Borrowing to be meet budget deficit increases government debt.
The correct statement(s) is/are: Show Answer

Q166) What does venture capital mean? Show Answer

Q167) The main objective of the 12th Five- Year Plan is Show Answer

Q168) What is/are the purpose/purposes of the `Marginal Cost of Funds based Lending Rate (MCLR)' announced by RBI?
1. These guidelines help improve the transparency in the methodology followed by banks for determining the interest rates on advances.
2. These guidelines help ensure availability of bank credit at interest rates which are fair to the borrowers as well as the banks.
Select the correct answer using the code given below. Show Answer

Q169) There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?
1. Reducing revenue expenditure
2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Reducing import duty
Select the correct answer using the code given below. Show Answer

Q170) Consider the miscellaneous functions performed by Securities Exchange Board of India (SEBI)
1. SEBI Checks Price Rigging
2. It Prohibits Insider trading
3. It prohibits fraudulent and Unfair Trade Practices
4. It promotes training of intermediaries of the securities market
Which of the above mentioned statements fall in the category of protective functions of SEBI? Show Answer

Q171) Which of the following is not considered securities? Show Answer

Q172) Consider the following statements regarding Government Securities (Gilt-edged Securities)
1. They have zero income default indicating that if we make investment in G secs, we will not loss our money
2. There is high rate of return
3. There is cent per cent liquidity meaning to get money, the holder can sell it in the stock market.
Which of the above is /are the feature of Government Securities? Show Answer

Q173) Government Securities are of various types.Identify the type of securities from the description given below-
1. They are money market instruments, are short term debt instruments issued by the Government of India and are issued in three tenors, namely, 91 day, 182 day and 364 day.
2. They are zero coupon securities and pay no interest.
3. They are issued at a discount and redeemed at the face value at maturity. For example, a 91 day Treasury bill of Rs.100/- (face value) may be issued at say Rs. 98.20, that is, at a discount of say, Rs.1.80 and would be redeemed at the face value of Rs.100/-.
4. The return to the investors is the difference between the maturity value or the face value (that is Rs.100) and the issue price .
Which type of securities have been mentioned in the above statements Show Answer

Q174) Consider these features :
1. Predominance of private sector
2. Laissez-Faire economic policy
3. All encompassing role of economic planning
This/these all belong(s) to a capitalist economy- Show Answer

Q175) Consider these policy measures in Indian economy:
1. Disinvestment
2. Policy of Navratnas
3. National Investment Fund
The correct chronological order in which they appeared on the scene is: Show Answer

Q176) Inflation is the persistent increase in the average price of commodities. Consider the following factors which would increase inflation:
1. Deficit financing and increase in budgetary deficits
2. Decrease in direct taxes
3. Decrease in indirect taxes
4. Increase in Black money in the economy
5. Defective supply chain
Select the correct factor(s) on the basis of codes given below: Show Answer

Q177) Consider the following:
1. Defective taxation system
2. Liberal economic policy
3. Weak deterrence against corruption
Which of these are causes of generation of black money? Show Answer

Q178) Consider the following statements about Interest Rate Derivatives (IRDs):
1. IRDs are the derivatives with the underlying asset as the long-term government securities held by commercial banks in India.
2. IRDs are traded on Stock Exchanges.
Which of the above statement(s) is/are correct? Show Answer

Q179) Which of the following three situations are unlikely to coexist under the concept of Impossible Trinity?
1. Fixed Exchange Rate
2. Higher GDP growth rate
3. Independent Fiscal Policy
4. Free Capital Movement
5. Independent Monetary Policy
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Q180) Consider these statements regarding budget deficit:
1. This is the excess of a Government's total expenditure over its income.
2. It has to be met by borrowing.
3. Borrowing to be meet budget deficit in creases government debt.
The correct statement(s) is/are: Show Answer

Q181) The term 'Food Credit' in the context of RBI's Credit/Monetary Policy implies: Show Answer

Q182) On the front of subsidy which of the following defines JAM best? Show Answer

Q183) Revenue of the state governments are raised from the following sources, except
1. entertainment tax.
2. expenditure tax.
3. agricultural income tax.
4. land revenue.
The correct statement(s) is/are made with- Show Answer

Q184) Excise duty is a tax levied on the
1. import of goods.
2. export of goods.
3. production of goods.
4. sale of goods.
The correct statement(s) is/are made with- Show Answer

Q185) Assertion-In power sector simplification in tariffs may improve transparency and yield consumption and collection efficiency along with governance benefits.
Reason-the complexity of the tariff structure because of different tarriffs for different sectors prevents economic actors from responding sufficiently to price signals.
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Q186) One of the most critical short term challenges confronting the Indian economy is the twin balance sheet problem – the impaired financial positions of the Public Sector Banks (PSBs) and some corporate houses and resolving this challenge would require
1. Recognition
2. Recapitalization
3. Resolution
4. Reform
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Q187) The fiscal sector registered the striking successes owing to ;
1. ongoing fiscal consolidation
2. improved indirect tax collection efficiency
3. an improvement in the quality of spending at all levels of government.
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Q188) Presently, the recommendations of the Fourteenth Finance Commission (FFC) are being implemented. FFC, during its award period of 2015-2020, has inter-alia, recommended distribution of grants to the States using 2011 Show Answer

Q189) Assertion-India’s domestic power tariff schedules have greater scope for progressivity.
Reason-There is need to balance greater revenue collection with greater welfare allocations.
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Q190) Assertion -From the angle of aggregate demand in India , domestic absorption has remained reasonably strong, despite reduction in overall investment.
Reason-Consumption has, of late, been the major driver of growth.
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Q191) Assertion-Government’s focus on fiscal consolidation limits the option of raising general government consumption expenditure.
Reason-Private corporate savings and investment showed poor results in 2014-15.
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Q192) The 14the Finance Commission has reduced the Central share of taxes to ……………..from 68%. Show Answer

Q193) Which of the following statements is not true?
A. Fiscal Policy is made for longer duration, while the Monetary Policy is for shorter duration .
B. Fiscal Policy gives direction to the economy.
C. Monetary Policy brings price stability.
D. Fiscal Policy is concerned with government revenue and expenditure, but Monetary Policy is concerned with borrowing and financial arrangement. Show Answer

Q194) Consider the following statements
1. Despite the number of tax returns filed picking up from mid-1980 onwards, nearly 85 percent of the economy remains outside the tax net.
2. Just 5.5 percent of earning individuals are in the tax net in India
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Q195) JAM-Preparedness Indices for Urban and Rural areas in each state has been formulated .What is difference between JAM-Preparedness Indices and BAPU-Preparedness Index?
1. JAM-Preparedness Indices uses Aadhaar penetration, basic bank account penetration and Banking Correspondents (BC) density as indicators for the indices where as BAPU-Preparedness Index, uses Aadhaar penetration and Point of Sale machines as indicators, for each state and has compared Rural-JAM Preparedness Index with BAPU-Preparedness Index.
2. JAM-Preparedness Indices uses Aadhaar penetration and Point of Sale machines as as indicators for the indices where as, BAPU-Preparedness Index uses Aadhaar penetration, basic bank account penetration and Banking Correspondents (BC) density for each state and has compared Rural-JAM Preparedness Index with BAPU-Preparedness Index.
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Q196) Government Securities are of various types.Identify the type of securities from the description given below-
1. They are money market instruments, are short term debt instruments issued by the Government of India and are issued in three tenors, namely, 91 day, 182 day and 364 day.
2. They are zero coupon securities and pay no interest.
3. They are issued at a discount and redeemed at the face value at maturity. For example, a 91 day Treasury bill of Rs.100/- (face value) may be issued at say Rs. 98.20, that is, at a discount of say, Rs.1.80 and would be redeemed at the face value of Rs.100/-.
4. The return to the investors is the difference between the maturity value or the face value (that is Rs.100) and the issue price .
Which type of securities have been mentioned in the above statements - Show Answer

Q197) Which of the following is not considered securities? Show Answer

Q198) Premium Bond is called so because
1. It is a bond that is trading above its par value.
2. investors want a higher yield, and will pay more for it.
3. The size of the premium will decline as the bond approaches maturity.
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Q199) Premium Bond is called so because
1. It is a bond that is trading above its par value.
2. investors want a higher yield, and will pay more for it.
3. The size of the premium will decline as the bond approaches maturity.
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Q200) Economic Survey argues that policymakers should decide where to apply JAM based on considerations of-
1. amount of leakages
2. control of the central government.
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Q201) Consider the following statements with reference to job scenario in formal sector
Assertion- India’s most pressing labour market challenge going forward will be to generate a large number of formal sector jobs.
Reason- Regulation- induced taxes on formal workers and spatial mismatch between workers and jobs are the big challenges.
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Q202) Consider the following terms/instruments that is traded in share market
1. Forwards
2. Futures
3. Options
4. Swaps
The above-mentioned terms/instruments are called - Show Answer

Q203) Fiscal measures to control inflation include
1. taxation
2. government expenditure
3. public borrowings
4. open market operations
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Q204) Consider the following statements with reference to deficit financing in India -
1. The main objective of deficit financing in an under developed country like India is to promote economic development.
2. The use of deficit financing in fact becomes essential for financing the development plan especially in underdeveloped countries.
3. Deficit financing is also used for the mobilization of surplus, ideal and unutilized resources in the country.
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Q205) Consider the following statements about Value Added Tax (VAT):
1. VAT is an indirect tax which covers production as well as distribution stage.
2. It promotes specialization as under VAT tax liability remains same irrespective of no. of stages in production and distribution process.
3. It reduces effective tax burden which encourages tax compliance.
4. It helps in reducing tax evasion.
Which of the above is/are correct? Show Answer

Q206) What are Treasury-Bills? Show Answer

Q207) Identify the type of budget from the description given below?
1. This type of budget is mostly used by the organizations and ministries involved in the developmental activities.
2. With a very detailed and objective analysis, this budgeting process is very result oriented in its approach.
Which of the following types of budget is referred to in the above mentioned statements - Show Answer

Q208) Consider the following statements about the features of Zero based budgeting?
1. Zero based budgeting has its clear advantage when the limited resources are to be allotted carefully and objectively.
2. It is quite flexible in nature and relies on rational methods, systematic evaluation to reallocate resources and justify the usage of funds.
3. It starts from a zero base unlike traditional budgets where incremental approach is used.
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Q209) Consider the items included in Capital Receipts in the budget
1. Loans raised by the government from the public through the sale of bonds and securities.
2. Borrowings by government from RBI and other financial institutions through the sale of Treasury bills.
3. Loans and aids received from foreign countries and other international Organisations like International Monetary Fund (IMF), World Bank, etc.
4. Receipts from small saving schemes like the National saving scheme, Provident fund, etc.
5. Recoveries of loans granted to state and union territory governments and other parties.
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Q210) Items of plan expenditure in budget are expenditure on
1. electricity generation,
2. irrigation and rural developments,
3. construction of roads, bridges, canals
4. science, technology and environment,
5. the assistance given by the Central Government for the plans of States and Union Territories (UTs)
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Q211) Expenses included in Revenue Expenditure in the Union Budget is/are
1. Expenditure on exports and external affairs.
2. Grants given to State governments even if some of them may be used for creation of assets.
3. Payment of interest on loans taken in the previous year.
4. Expenditure on subsidies.
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Q212) With reference to interrelation of Balance on current account and balance on capital account which of the following is correct?
1. A deficit in the current account must be settled by a surplus on the capital account.
2. A surplus in the current account must be matched by a deficit on the capital account.
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Q213) Non-plan revenue expenditure is accounted for by
1. interest payments
2. subsidies (mainly on food and fertilisers)
3. wage and salary payments to government employees
4. grants to States and Union Territories governments
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Q214) Non-plan capital expenditure in the union budget mainly includes
1. defence
2. loans to public enterprises
3. loans to States, Union Territories and foreign governments
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Q215) Expenditure is a capital expenditure, if it satisfies any one of the following two conditions:
1. The expenditure must create an asset for the government. For example, Construction of Metro is a capital expenditure as it leads to creation of an asset. However, any amount paid as salaries is not a capital expenditure as there is no increase in the assets.
2. The expenditure must cause a decrease in the liabilities. For example, repayment of borrowings is a capital expenditure as it leads to a reduction in the liabilities of the government.
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Q216) With reference to the expenditure of the government consider the following items/categories-
1. Construction of Metro
2. repayment of borrowings
3. amount paid as salaries
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Q217) Assertion-The revenue receipts come from direct & indirect taxes and also by way of non-tax revenue.
Reason-The revenue expenditure takes place on account of administrative expenses, interest payment, defence expenditure & subsidies.
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Q218) Identify the type deficits from the description given below-
1. It is the difference between all receipts and expenditure of the government, both revenue and capital.
2. It is called deficit financing by the government of India
3. It has not figured in union budgets in recent
In the above mentioned statements the type of deficit is Show Answer

Q219) Identify the type deficits from the description given below-
1. It is the difference between all receipts and expenditure of the government, both revenue and capital.
2. It is called deficit financing by the government of India
3. It has not figured in union budgets in recent
In the above mentioned statements the type of deficit is Show Answer

Q220) The motions to reduce the amounts of demands for grants in the budget are called ‘Cut Motions’. Cut Motions can be classified into
1. Disapproval of Policy Cut
2. Economy Cut
3. Token Cut
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Q221) An Interim Budget is not the same as a 'Vote on Account'.
1. While a 'Vote on Account' deals only with the expenditure side of the government's budget, an Interim Budget is a complete set of accounts, including both expenditure and receipts.
2. A national interim Budget refers to the budget of a government that is going through a transition period whereas a vote-on-account presents an estimate of expenditures to be sanctioned by the exchequer till the Budget is passed
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Q222) Consider the following statements-
1. Fiscal Deficit fully reflects the indebtedness of the government and throws light on the extent to which the government has gone beyond its means and the ways in which it has done so.
2. Fiscal deficit can be either ‘gross’ or ‘net’.
3. fiscal deficit is equal to budgetary deficit plus governments market borrowings and liabilities.
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Q223) Consider the following statements -
1. Regularity audit consists mainly in checking that the payments have been duly authorised and are supported by proper vouchers in the prescribed form.
2. Performance audit seeks to find out whether the resources have been utilised efficiently by deploying them in an optimum manner.
3. Receipts audit involves the audit of income-tax and custom and excise receipts.
Which of the above- mentioned is correct? Show Answer

Q224) Identify the type of audit that is done in India from the description given below-
1. It is an accountancy audit to check the accuracy of arithmetical calculations and to see that all payments are supported by receipted vouchers.
2. In its essence, it is no different from the limited audit of private auditors
3. Its objects are detection of fraud the detection of technical errors and the detection of errors of principles.
Which of the following is described in the above -mentioned statements? Show Answer

Q225) In context of balance of payments of India difference between Balance of Trade and Current Account means that :
1. Balance of trade includes only visible items.
2. Current Account records both visible and invisible items.
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Q226) Capital Account is used to:
1. finance deficit in current account
2. absorb surplus of current account
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Q227) Which of the following statements is/are true?
1. Surplus in capital account arises when credit items are more than debit items.
2. Deficit in capital account arises when debit items are more than credit items.
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Q228) Which of the following statements is/are true?
1. Surplus in capital account arises when credit items are more than debit items.
2. Deficit in capital account arises when debit items are more than credit items.
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Q229) Apart from taxes, governments also receive revenue from other non-tax sources.The non-tax sources of public revenue is /are
1. Fees
2. Profits from public sector enterprises
3. Gifts and grants
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Q230) Assertion- Fiscal Responsibility and Budget Management (FRBM Documents in Budget are parts of the budget
Reason-FRBM Documents in Budget are Documents presented under the provisions of the Fiscal Responsibility and Budget Management Act, 2003.
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Q231) How monetized deficit is different from the Traditional Budget deficit ?
1. Traditional Budget deficit includes 91-day treasury bills held by both, the RBI and non-RBI entities whereas Monetized deficit includes 91-day Treasury Bills held only by the RBI.
2. Traditional Budget deficit includes only short-term sources of finance whereas Monetized deficit includes long-term securities also.
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Q232) Difference between Current account deficit and Trade deficit is:
1. Current Account is the sum of Balance of trade, Factor Income and Net transfer payments. Balance of Trade is the difference between value of import and export.
2. Current account deficit Occurs when a country’s total imports of goods, services and transfers is greater than the country’s total export of goods, services and transfers.
Which of the statement(s) given above is/ are correct? Show Answer

Q233) Net reserve bank credit to the government’ is nothing but Show Answer

Q234) Consider the following statements-
1. Demutualisation is the process through which any member-owned organisation becomes a shareholder-owned company- either listed on a stock exchange or closely held by its shareholders.
2. In India, demutualisation relates more to the stock exchanges than to insurance companies.
The correct statement(s) is/are made with: Show Answer

Q235) Premium Bond is called so because
1. It is a bond that is trading above its par value.
2. investors want a higher yield, and will pay more for it.
3. The size of the premium will decline as the bond approaches maturity.
Select the correct answer using the codes given below: Show Answer