Test Your Knowledge: Economy Practice Questions

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Economy Practice Questions:

Economy a subject that creates fear to many aspirants and the subject is quite useful from exam points of view.

If we observe the past questions from exams like UPSC. SSC and Bank there will be same pattern  showing huge number of economy questions.

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So to solve that problem we have come up with Economy Practice Questions.


Economy Practice Questions Set-A

 

Que-1. If the cash reserve ratio (CRR) is scrapped by RBI, which of the following will happen?

(a)Less money in the market

(b)Interest rates will increase

(c)Prices will increase i.e. Inflation

(d)Prices will decrease I.e. deflation

 

Que-2. Consider the following statements on recommendation of  Nachiket Mor Committee on financial inclusion?

(1)Every Indian above the age of 18 years having a full-service, safe and secure electronic bank account by January 2016

(2)A state-level regulatory commission will consolidate supervision of all non-governmental organisations and money service businesses.

(3)The Aadhaar will be the prime driver towards rapid expansion in the number of bank accounts.

(4)Setting up of ‘Payments Banks’ to “provide payment services and deposit products to small businesses and low-income households” with a maximum balance of Rs 50,000 per customer.

Which of the above is/are the recommendation?

(a) (1) only

(b) (3) only

(c) (1) and (2)

(d)All of the above

 

Que-3. Which of the following statements are incorrect?

(a)The NBFCs are required to maintain CRR deposits with RBI.

(b)RBI pays interest rates on CRR deposits.

(c)An Increase in CRR would decrease the liquidity from the market.

(d)MSF > Repo Rate > Reverse Repo Rate.

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Que-4. 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-5. Which of the following statements are correct?

(a)Repo rate is the interest rate paid by RBI to banks on short term deposits.

(b)A decrease in repo rate will decrease the home loan interest rates.

(c)HDFC is a Non-scheduled Commercial bank.

(d)SLR is always 20% higher than CRR.

 

Que-6. Due to which of the following reasons RBI was not able to control inflation in recent years?

(1)Black money

(2)Increase in oil prices

(3)High Fiscal deficit

(4)Supply side issues

Point out the correct answer from below

(a) (1), (2) and (3)

(b) (2) and (4)

(c) (1), (2) and(4)

(d)All of the above

 

Que-7. Out of the items given below, which can cause demand pull inflation?

(a)Increasing interest rates

(b)Increasing investment

 (c)Increasing money supply

(d)Increased cost of materials

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Que-8. Correct statements about White label ATMs

       (a)Company has to open 2/3rd of its ATM in areas having tier 3 to tier 6 level population.

(b)Before opening such booths in rural areas, the company has to get permission from NABARD.

(c)Both 1 and 2

(d)Neither 1 nor 2

 

 

Que-9. 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-10. Which of the following is incorrect statement?

(1)RTGS and NEFT are online money transfer modes within India.

(2)NEFT is slower than RTGS.

(3)NEFT can be used only for transactions above Rs.2 lakh

Choose the correct answer from below.

(a)Only 3

(b)Only 1 and 2

(c)Only 2 and 3

(d)All of them

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Que-11. Point out the correct statement from below?

(a)Repo rate is always 100 basis points higher than MSF lending rate.

(b)Repo rate is always100 basis point higher than reverse repo rate.

(c)Reverse repo rate is always 100 lower than MSF lending rate

(d)None of above.

 

Que-12. Nachiket Committee on Financial services has recommended new type of Payment banks. Which of the following is not true about them?

(a)Scheduled commercial banks will be allowed to open Payment banks as subsidiaries.

(b)Payment banks will be exempted from CRR and SLR requirement.

(c)Mobile phone companies, consumer goods companies, post office and cooperative societies will be allowed to apply for Payment bank license.

(d)None of Above

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Que-13. A zero rate of inflation obtains necessarily in a year where the annual rate of inflation
(a) in every week of the year is zero
(b)is falling in every week of the year
(c)is both falling and rising in a year
(d)is constant in every week of the year


      Solution for Economy Practice Questions set A

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

 Thank you and All the Best

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