In Association with

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1) Which among the following is taken as the real measure of a country’s international competitiveness?

a) Real exchange rate
b) Nominal exchange rate
c) Superfluous exchange rate
d) None of the above

2) What records a country’s transactions (made by individuals, firms and government bodies.) with the rest of the world?

a) Trade deficit
b) Capital Budget
c) Foreign imports
d) Balance of Payments or BoP

3). Consider the following statements and identify the right ones.
i. COR(capital output ratio) is relatively low in labour intensive sectors.
ii. COR will be high in capital intensive sectors
iii. Both
v. None

4). Consider the following statements and identify the right ones.
i. Higher level of capital-output ratio indicates efficient use of capital.
ii. It reflects the productivity of capital in the economy

a. I only
b. ii only
c. both
d. none


5). The buying, selling of treasury bills, government and other securities by RBI is called
a. Cash reserve ratio
b. Statutory liquidity ratio
c. Open market operations
d. None of the above

(6) Which one of the following statements appropriately describes the “fiscal stimulus”?

(a.) It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth

(b.) It is an intense affirmative action of the Government to boost economic activity in the country

(c.) It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation

(d.) It is an extreme affirmative action by the Government to pursue its policy of financial inclusion

(7) A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

(a.) It is the impact of drastic deficiency in supply due to failure of crops

(b.) It is the impact of the surge in demand due to rapid economic growth

(c.) It is the impact of the price levels of previous year on the calculation of inflation rate

(d.)None of the statements (a), (b) and (c) ‘given above is correct in this context

(8) Receipts in budget can be capital or revenue. Which of these is/are capital receipts? recoveries

2.provident fund receipts


Select the answer using code below:-

A.1,and 2only B. 1and 3 only C.2and 3 only . D.1 2 and 3

9.Consider the following statements

  1. 1. GDR is a certificate issued by a depository bank, which purchases shares of foreign companies and deposits it on the account.
    2. GDRs enable a company, the issuer, to access investors in capital markets outside of its home country.
    3. Regulatory and other agencies suspect that GDR route is being used for bringing back suspected illicit funds stashed abroad.
    Which of the above statements are correct?
    a) 1,2
    b) 1,2,3
    c) 2,3
    d) 1,3

(10). The portfolio investment by foreign institutional investors is called
a. FDI
b. FII
c. Balance of payment
d. SDR

Answers of economics questions Set-B

Ans.1 – (a) real exchange rate R is defined as the ratio of the price level abroad and the domestic price level, where the foreign price level is converted into domestic currency units via the current nominal exchange rate.

Ans.2-(d) The balance of payments, also known as balance of international payments and abbreviated BoP, of a country is the record of all economic transactions between the residents of the country and the rest of the world in a particular period (over a quarter of a year or more commonly over a year). These transactions are made by individuals, firms and government bodies.

Ans.3-(c) It is high in capital intensive industries because of more use of capital and time lag between investment and production.

Ans.4-( b). ii only
COR refers to the number of units of capital required to produce one unit of output. A higher level of it means inefficient use of capital.




Ans.8(a) grants are revenue receipts
In Association with

Explanation: GDR is a popular financial instrument used by listed companies in India, as also in many other countries, to raise funds denominated mostly in US dollar or euros. GDRs are typically bank certificates issued in more than one country for shares of a company, which are held by a foreign branch of an international bank.


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