Q31. Which one of the following agencies of the Indian Government implements the price support scheme (PSS)?
(a) FCI
(b) NAFED
(c) Agriculture pricing agency of India
(d) None of the above
Answer: (b)
Explanation: In Order to help the farmers in getting remunerative prices for their produce with a view to encouraging higher investment and as also to increase production and productivity of a commodity, the government declares Minimum Support Price (MSPs) for 25 notified agricultural commodities for each Kharif & Rabi crop season.
National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) is one of the Central Nodal Agencies which implements PSS.
Q32. In India, deficit financing is used for raising resources for:
1. Redemption of public debt
2. Adjusting the balance of payments
3. Reducing the foreign debt
4. Economic development
Which of the above statements is/are correct?
(a) 4 only
(b) None of the above
(c) 2 and 3 only
(d) 1 and 2 only
Answer: (a)
Explanation: Deficit financing is a pragmatic tool of economic development and has been used by the Indian govt. to obtain the necessary resources to finance the five-year plans.
Q33. The Indian economy is characterized by
(a) Pre-dominance of agriculture
(b) Low per capita income
(c) Massive unemployment
(d) all of the above
Answer: (d)
Explanation: The Indian Economy is characterized by the predominance of agriculture, low per capita income, and massive unemployment. In India contribution of agriculture to GDP is around 17.9%.
Q34. What is the annual rate aimed in the Eighth Five Year Plan
(a) 5.6%
(b) 6%
(c) 6.5%
(d) 7%
Answer: (a)
Explanation: The targeted annual growth rate was 5.6% but the actual growth rate was 6.7%.
Q35. Which one of the following committees recommended the abolition of reservation of items for the small-scale sector in the industry?
(a) Abid Hussian Committee
(b) Narasimham Committee
(c) Nayak Committee
(d) Rakesh Mohan Committee
Answer: (a)
Explanation: Abid Hussain Committee (1997) recommended total dereservation and desired to replace the policy of reservation with a policy of promotion and strengthening of small-scale units.
Q36. Bank Rate implies the rate of interest:
(a) Paid by the Reserve Bank of India on the Deposits of Commercial Banks
(b) Charged by Banks on loans and advances
(c) Payable on Bonds
(d) At which the Reserve Bank of India discounts the Bills of Exchange
Answer: (d)
Explanation: Bank Rate is the rate of interest at which the central bank of a country provides refinancing facilities to commercial banks. The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase. Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
Q37. Consider the following:
Industrial Finance Corporation of India
Industrial Credit and Investment Corporation of India
Industrial Development Bank of India
Unit Trust of India
The correct sequence in which the above was established is:
(a) 1, 2, 4, 3
(b) 1, 3, 2, 4
(c) 4, 3, 2, 1
(d) 1, 4, 3, 2
Answer: (a)
Explanation:
IFCI – July 1948;
ICICI – 1955;
UTI – 1st February 1964 under the UTI act 1963
IDBI –1st July 1964;
Q38. The sum of which of the following constitutes Broad Money in India?
Currency with the public
Demand deposits with banks
Time deposits with banks
Other deposits with RBI
Choose the correct answer using the codes given below:
(a) 1 and 2
(b) 1, 2 and 3
(c) 1, 2, 3 and 4
(d) 1, 2 and 4
Answer: (c)
Explanation: Narrow money is the most liquid part of the money supply because the demand deposits can be withdrawn anytime during banking hours. Time deposits on the other hand have a fixed maturity period and hence cannot be withdrawn before the expiry of this period. When we add the time despots into the narrow money, we get the broad money, which is denoted by M3.
M3 = Narrow money + Time Deposits of the public with banks.
We note here that the Broad money does not include the interbank deposits such as deposits of banks with RBI or other banks. At the same time, time deposits of the public with all banks including the cooperative banks are included in the Broad Money.
Q39. The theory of distribution relates to which of the following?
(a) The distribution of assets
(b) The distribution of income
(c) The distribution of factor payments
(d) Equality in the distribution of the income and wealth
Answer: (d)
Explanation: The theory of distribution states the way by which distribution of income and output is done among individuals or among factors of production (like labor, land, and capital, etc). So the theory of distribution relates to equality in the distribution of income and wealth.
Q40. The base of the Consumer Price Index for Industrial Workers is being shifted from 1982 to—
(a) 1995
(b) 1998
(c) 2000
(d) 2001
Answer: (d)
Explanation: The base of CPI for industrial workers is being shifted from 1982 to 2001.
