November 23, 2012

Economical Background - Current knowledge

1.Development expenditure of the Central government does not include
defence expenditure
expenditure on economic services
expenditure on social and community services
grant to states

2.Gilt-edged market means
bullion market
market of government securities
market of guns
market of pure metals

3. In the last one decade, which one among the following sectors has attracted the highest foreign direct investment inflows into India?
Chemicals other than fertilizers
Services sector
Food processing

4. Devaluation of a currency means
reduction in the value of a currency vis-a-vis major internationally traded currencies
permitting the currency to seek its worth in the international market
fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies
fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners

5. In the second nationalization of commercial banks, ___ banks were nationalized.

6. Depreciation means
closure of a plant due to lock out
closure of a plant due to labour trouble
loss of equipment over time due to wear and tear
destruction of a plant in a fire accident

7. If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits
will decrease
will increase
will neither increase nor decrease
None of the above

8. Deficit financing leads to inflation in general, but it can be checked if
government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
only aggregate demand is increased
all the expenditure is denoted national debt payment only
All of the above


9. India changed over to the decimal system of coinage in

April 1995
April 1957
April 1958
April 1959
10. If the cash reserve ratio is lowered by the RBI, its impact on credit creation will be to
increase it
decrease it
no impact
None of the above

11. The currency convertibility concept in its original form originated in
Wells Agreement
Bretton Woods Agreement
Taylors Agreement
None of the above
12. Gross domestic capital formation is defined as
flow of expenditure devoted to increased or maintaining of the capital stock
expenditure incurred on physical assets only
production exceeding demand
net addition to stock after depreciation

13. On July 12, 1982, the ARDC was merged into
None of the above
14. Which of the following is the most appropriate cause of exports surplus?
Country's exports promotion value
Country's stringent import policy
Developments in national and international markets
None of the above
15. In the state of India, the State Financial Corporation have given assistance mainly to develop
agricultural farms
cottage industry
large-scale industries
medium and small-scale industries
16. The central co-operative banks are in direct touch with
state co-operative banks
land development banks
central government
17. The first wholly Indian Bank was set up in
18. States earn maximum revenue through
land revenue
custom revenue
commercial taxes
excise duties on intoxicants
19. Our financial system has provided for the transfer of resources from the centre to the states; the important means of resource transfer are
tax sharing
All the above
20. Debenture holders of a company are its
21. Excise duty is a tax levied on the
import of goods
export of goods
production of goods
sale of goods

What is Excise Duty? Is it collected by the State Government or the Central Government? How is it different from Sales Tax?
Excise duty is a tax on manufacture or production of goods. Excise duty on alcohol, alcoholic preparations, and narcotic substances is collected by the State Government and is called "State Excise" duty. The Excise duty on rest of goods is called "Central Excise" duty and is collected in terms of Section 3 of the Central Excise Act, 1944.
Sales Tax is different from the Excise duty as former is a tax on the act of sale while the latter is a tax on the act of manufacture or production of goods.

22. In pursuance with the recommendations of Narsimhan Committee, the RBI has framed new guidelines
to govern entry of new private sector banks to make the banking sector more competitive
to reduce the freedom given to banks to rationalize their existing branch network
to setup more foreign exchange banks
to lend more easily for industrial development
23. Which of the following is the first Indian private company to sign an accord with Government of Myanmar for oil exploration in two offshore blocks in that country?
Reliance Energy
Essar Oil
24. Non Tax revenues can be increased by improving the working of the
State Road Transport Corporations
electricity boards
commercial irrigation projects
All of the above

25.Which of the following is not viewed as a national debt?
Provident Fund
Life Insurance Policies
National Saving Certificate
Long-term Government Bonds

26. The condition of indirect taxes in the country's revenue is approximately
70 percent
75 percent
80 percent
86 percent

27. Deficit financing means that the government borrows money from the
local bodies
big businessmen

28. Revenue of the state governments are raised from the following sources, except
entertainment tax
expenditure tax
agricultural income tax
land revenue

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