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Economics MCQs CSEET

1. The IVFRT project is related to which among the following? Public Health Population Control Tax Revenue Immigration Correct Answer: D

2. Foreign Direct Investment(FDI) and Foreign Institutional Investment(FII) are distinct in terms of? FDI brings capital, technology & management and FII brings only capital FDI targets specific sectors and FII help in increasing foreign capital availability FII is considered more stable FII targets both primary and secondary market while FDI targets only primary. Correct Answer: A

3. In India, the Insurance Portability is available to the customers in context with__: Life Insurance Health Insurance Vehicle Insurance Choose the correct option Only 1 Only 1 & 2 Only 2 Only 2 & 3 Correct Answer: C

4. Consider the following statements: 1. Bulk of employment in India is in rural areas. 2. The disguised unemployment in agricultural sector is perennial. 3. Industrialization has rendered several people jobless in India. Which of the statement(s) given above is/are correct ? 1 and 2 1 and 3 2 and 3 1, 2 and 3 Correct Answer: A <1 and 2>

5. Which among the following is / are included in the balance of payments? 1. Balance of Trade 2. Foreign Direct Investments 3. Foreign Indirect Investments 4. Foreign Aid 5. Foreign Tourist Expenditures 6. Domestic Tourism Expenditures Choose the correct option from the codes given below: 1, 2, 3, 4, 5 & 6 Only 1, 2 & 5 Only 2, 3, 4 & 5 Only 1, 2, 3, 4 & 5 Correct Answer: D [ Only 1, 2, 3, 4 & 5 ]

6. With reference to the various on going trade partnership negotiations, consider the following: 1. TPP 2. TTIP 3. RECP India is participating in which among the above? Only 1 & 2 Only 2 & 3 Only 3 Only 1 & 3 Correct Answer: C [ Only 3 ]

7. Recently, the term “Evergreening of Patents” was making news. Which of the following is / are correct statements in this context? 1. It generally pertains to prolonging the life of patent by making minor incremental changes in original patented product 2. There are no provisions in Indian Patents Act to prevent Evergreening 3. Evergreening of patents is generally used by Pharmaceutical companies Which among the above statements is / are correct? Only 1 Only 1 & 2 Only 1 & 3 1, 2 & 3 Correct Answer: C [ Only 1 & 3 ] Notes: The Indian Patents Act 1970 defines a patent as a grant or right to exclude others from making, using or selling one’s invention and includes the right to license others to make, use or sell it. Section 3 of the Act contains an exhaustive list of what cannot be considered an invention, such as a frivolous invention, a mere re-arrangement, a farming method, mere presentation of information and a mere discovery of a new form of a known substance that does not result in increased efficacy. Evergreening refers to prolonging the life of the patent by making minor incremental changes that do not necessarily alter the utility and features of the original patented product. Here the innovator is just trying to extend patent protection and prevent competition from manufacturing the same product. Section 3(d) of the Indian Patents Act is specially intended to prevent evergreening.

8. To curb the revenue deficit, one should advise the government to__: 1. cut expenditures on subsidy 2. cut social expenditures 3. impose import controls Choose the correct option from the codes given below: Only 1 & 2 Only 1 Only 2 & 3 1, 2 & 3 Correct Answer: A [ Only 1 & 2 ] Notes: The government can curb the revenue deficit either by increasing revenue receipts or by decreasing revenue expenditure. Revenue expenditure can but reduced by a cut in social expenditures and subsidies. Since both ways have their own economic and political ramifications, government could never achieve what it was supposed to achieve as per the FRBM act. The FRBM act had mandated the government to eliminate revenue deficit by March 2008 (it was later shifted to March 2009). It has never been achieved. The act also mandates the government to place the three separate documents along with Budget documents viz. Macro-Economic Framework Statement, Medium-Term Fiscal Policy Statement and Fiscal Policy Strategy Statement. These statements every time reiterate the government vow to achieve FRBM targets

9. With reference to the National Small Savings Fund (NSSF), which among the following statements is / are correct? 1. NSSF is a part of the Public Account of India 2. The State Governments can borrow money from the National Small Savings Fund Choose the correct option from the codes given below: Only 1 Only 2 Both 1 & 2 Neither 1 nor 2 Correct Answer: C [ Both 1 & 2 ] Notes: In order to account for all the monetary transactions under small savings schemes of the Central Government under one umbrella, ‘National Small Savings Fund’ (NSSF) was set up in the Public Account of India w.e.f. 1st April, 1999. The net accretions under the small savings schemes are invested in the special securities of various States/Union Territories (with legislature)/Central Governments. The minimum obligation of States to borrow from the National Small Savings Fund (NSSF) was brought down from 100 per cent to 50 percent of net collections in 2012.

10. Both Debentures and Bonds: 1. are debt instruments 2. can be secured by assets or unsecured 3. can be issued by both public and private organizations Select the correct statements from the codes given below: Only 1 & 2 Only 2 & 3 Only 1 & 3 1, 2 & 3 Correct Answer: D [ 1, 2 & 3 ] Notes: Debentures are instrument issued by companies to raise debt capital. As an investor, you lend you money to the company, in return for its promise to pay you interest at a fixed rate (usually payable half yearly on specific dates) and to repay the loan amount on a specified maturity date say after 5/7/10 years (redemption). Normally specific asset(s) of the company are held (secured) in favour of debenture holders. This can be liquidated, if the company is unable to pay the interest or principal amount. Unlike loans, you can buy or sell these instruments in the market. Bonds are broadly similar to debentures. They are issued by companies, financial institutions, municipalities or government companies. They may or may not be secured.

11. Consider the following bodies: NABARD NHB SIDBI EXIM MUDRA Which of the above are refinancing institutions in India? Only 1, 2 & 3 Only 3, 4 & 5 Only 1, 2, 3 & 5 1, 2, 3, 4 & 5 Correct Answer: D [ 1, 2, 3, 4 & 5 ] Notes: Financial Institutions (FIs) are classified into three categories: First are Term-lending institutions, whose main activity is direct lending by way of term loans and investments; Second are Refinance institutions, such as the National Bank for Agriculture and Rural Development (NABARD), Small Industries Development Bank of India (SIDBI) and National Housing Bank (NHB), which mainly extend refinance to banks as well as non-banking financial institutions and; Third are Investment institutions such as Life Insurance Corporation (LIC), which deploy their assets largely in marketable securities. State/ regional level institutions form another distinct group.

12. Consider the following: 1. All loans raised by the Government by the issue of treasury bills 2. Ways and means advances 3. Judicial deposits Which of the above is/are credited to Consolidated Fund of India. Only 1 Only 1 & 2 Only 2 & 3 1, 2 & 3 Correct Answer: B [ Only 1 & 2 ] Notes: Examples of monies that go into consolidated fund include all revenues received by the Government of India or any state, all loans raised by the issue of treasury bills, loans or ways and means advances and all moneys received by the Government in repayment of loans. Examples of monies that go into public account include: provident fund deposits, judicial deposits, savings bank deposits, departmental deposits, remittances and so on.

13. Which among the following commodities displays characteristics of inferior goods? Wheat Kerosene LPG Paddy Correct Answer: B [ Kerosene ] Notes: Kerosene consumption tends to decline as incomes rise. As households get richer, they consume less of it because they substitute to cleaner, higher quality but more expensive fuels like LPG.

14. Which of the following are the criteria for census town? 1. Minimum population of 5000 2. At least 75% of male working population engaged in non-agricultural pursuits 3. A density of population of at least 400 per sq.km Select the correct option from codes given below: 1 & 3 Only 2 Only 2 & 3 Only 1, 2 & 3 Correct Answer: D [ 1, 2 & 3 ] Notes: Census town is defined as an area with minimum population of 5000. At least 75% of male working population engaged in non-agricultural pursuits and a density of population of at least 400 per sq. km

15. Consider the following statements: Mixed banking is a combination of deposit banking and investment banking When banks undertake the activities of wholesale and retail banking together, it is called universal Banking Which of the above statements is/are correct? 1 Only 2 Only Both 1 & 2 Neither 1 nor 2 Correct Answer: C [ Both 1 & 2 ] Notes: Mixed banking basically stands for a combination of two pure banking models like commercial banking and investment banking in different proportions. Mixed banking is an approach where banks undertake both commercial and industrial banking and is a popular banking model in countries like Germany and Japan. A universal bank is a financial service conglomerate combining retail, wholesale and investment banking services under one roof.

16. Consider the following statements about the National Agriculture Market (NAM): It provides common electronic platform for farmers across the country to sell their crops Small Farmers’ Agribusiness Consortium (SFAC) is the lead agency for the implementation of the programme Which of the above statements is/are correct?

1 Only 2 Only Both 1 & 2 Neither 1 nor 2 Correct Answer: C [ Both 1 & 2 ] Notes: Both are correct statements National Agriculture Market (NAM) provides common electronic platform for farmers across the country to sell their crops. Small Farmers’ Agribusiness Consortium (SFAC) is a Society under the administrative control of Department of Agriculture and Cooperation, Govt. of India. It is the lead promoter of NAM.

17. The terms IBAN, BBAN, SEPA and SWIFT are associated with: International Banking Disaster Management Nuclear Waste Management International Maritime Boundaries Correct Answer: A [ International Banking ] Notes: SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. SEPA stands for Single Euro Payment Are. The aim of SEPA is to ensure that payments within Europe take place as simply and effectively as those within a single country. IBAN stands for the International Bank Account Number is a unique identifier helping banks process payments from person to person automatically. The IBAN contains all necessary information of the owner if a bank account such as the account number, bank and branch information and country code. BBAN is short for Basic Bank Account Number. It represents a country-specific bank account number.

18. The term “General Review of Quotas (GRQ)”, which was recently in news, is associated to which organization? International Monetary Fund South Asian Association for Regional Cooperation (SAARC) Association of Southeast Asian Nations (ASEAN) Organization of the Petroleum Exporting Countries Correct Answer: A [ International Monetary Fund ] Notes: First option is the correct answer

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