Economy Practice Questions


Economy Learn with Questions:

The subject which is very critical for most of the students.


Que-1 . Match List-I with List-II  and select the correct answer using the code given below the lists:

List –I                                                        List-II

(Type of Unemployment)                            (Associated Fact)

  1. Frictional Unemployment                   1.Non-availability of job
  2. Structural Unemployment                   2. Marginal productivity is zero
  3. Seasonal Unemployment                   3. Use of obsolete technology for production
  4. Disguised Unemployment                   4. Population pressure on land


                  A B C D

              (a) 4 2 1 3

              (b) 1 3 4 2

              (c) 4 3 1 2

              (d) 1 2 4 3


Que-2.  Select the correct order of best to worst means of deficit financing-

             (a)Internal borrowings, Printing currency, External borrowing, External aid

             (b)External aid, External borrowing, Printing Currency, internal borrowings

             (c)External aid, External borrowing, Internal borrowings, Printing Currency

             (d)External borrowing, internal borrowings, printing Currency, External aid


Que-3.   Which of the following terms indicate a mechanism used by commercial banks for providing credit to the Government?
           (a) Cash Credit Ratio

           (b) Debit Service Obligation

          (c) Liquidity Adjustment Facility

          (d) Statutory Liquidity Ratio

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Que-4.  India has experienced persistent and high food inflation in the recent past. What could be the reasons?           

  1. As a consequence of increasing incomes, the consumption pattern of the people has undergone a significant change.
  2. The food supply chain has structural constraints.
  3. Due to gradual switched over to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%.

Which of the statements given above is/are correct?

            (a) 1 and 2       (b) 1 and 3

            (c) 2 and 3       (d) Only 2


Que-5.   A country is said to be in a debt trap if

            (a) It has to borrow to make interest payments on outstanding loans

            (b) It has to borrow to make interest payments on standing loans.

            (c) It has been refused loans or aid by creditors abroad

            (d) The World Bank charges a high rate of interest on outstanding as well as new loans


Que-6.  Consider the following statements

  1. S&P CNX Nifty os one of several leading stock market index.
  2. Nifty is owned and managed by a joint venture company between National Stock Exchange and Credit Rating and Information Services of India Ltd.

Which of the statements given above is/are correct?

            (a) Only 1                    (b) Only 2

            (c) Both 1 and 2          (d) Neither 1 nor 2

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Que-7.  Consider the following statements about NABARD

  1. NABARD can accept the short term deposits from public.
  2. NABARD depends on the general line of credit received from the Reserve Bank of India to finances the agricultural credits.

Which of the statements given above is/are correct?

            (a) Only 1                     (b) Only 2

            (c) Both 1 and 2          (d) Neither 1 nor 2


Que-8.  In the context of India’s Five year Plans, a shift in pattern of Industrialization with lower emphasis of the heavy industry and move on infrastructure begins in

            (a) Fourth Plan            (b) Sixth Plan

            (c) Eight Plan              (d) Tenth Plan


Que-9.   Consider the following options

         (1)Budgetary deficit

         (2)Plan expenditure

         (3)Market borrowings (through govt security/bond)

         (4)Other liabilities (pension and provident to be given in future)

Fiscal deficit can be defined as which of the above?

         (a). (1) and (2)

         (b). (1) and (3)

        (c). (1) , (3) and (4)

        (d). All of the above


Que-10.   The growth rate of the Per Capita Income at the current price is higher than the Per Capita Income at constant prices, because the latter takes into account the rate of

            (a)  Increase in price level

            (b) Population growth

            (c) Growth in money supply

            (d) Increase in wage rate

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Solutions to Economy Practice Question

  1. B
  2. C
  3. D
  4. A
  5. B
  6. C
  7. B
  8. B
  9. C
  10. A

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Thank you and all the best