1. The investment arm of the world bank is
a. IDA
b. IFC
c. IBRD
d. MIGA
ANSWER: b. IFC
IFC was established in 1956. It is known as the investment arm of the World Bank.
2. The insurance arm of world bank is
a. IDA
b. IFC
c. IBRD
d. MIGA
ANSWER: d. MIGA
MIGA is known as the insurance arm of World Bank. It was established in 1988.
3. Consider the following statements and identify the right ones.
i. MIGA does not offers political risk insurance for projects to developing member countries
ii. MIGA also helps investors and lenders deal with investment risks
a. i only
b. ii only
c. both
d. none
ANSWER: b. ii only
MIGA offers political risk insurance for projects to developing member countries.
4. Consider the following statements and identify the right ones.
i. IFC is governed by board of governors
ii. It mobilizes capital in international capital markets
a. i only
b. ii only
c. both
d. none
ANSWER: c. both
International Finance Corporation is governed by board of governors who are represented by member countries.
5. Consider the following statements and identify the right ones.
i. ICSID is a multilateral treaty formulated by executive directors of IBRD
ii. All the countries have deposited their instruments of ratification, acceptance of the convention.
a. I only
b. ii only
c. both
d. none
ANSWER: a. I only
Not all the countries have deposited their instruments of ratification, acceptance of the convention.
6. Consider the following statements and identify the right ones.
i. The head of WTO is known as director general
ii. The WTO summit is held once in very year
a. I only
b. ii only
c. both
d. none
ANSWER: a. I only
The WTO summit is held once in two years. The summit is known as Ministerial Conference.
7. Consider the following statements about priority sector lending
1.All banks have to lend at least 40% of their net credit to the priority sector
2.Foreign banks with less than 20 branches will move to total priority sector target of 40 percent by 2019-20.
Which of the above statements are correct?
a) Only 1
b) Only 2
c) Both
d) None
ANSWER: c) Both
8. Consider the following statements about GST
1. Both Central and State taxes will be collected at the point of sale.
2. The Central and State GST will be charged on the manufacturing cost.
Which of the above statements are correct?
a) Only 1
b) Only 2
c) Both
d) None
ANSWER: c) Both
9.Consider the following statements related to GST bill
1. The Centre will have one third weight in the GST Council while the states will have the remaining two-thirds and decisions will have to be passed with 75% vote.
2. Petroleum and Alcohol os excluded from GST
Which of the above statements is/are correct?
a) Only 1
b) Only 2
c) Both
d) None
ANSWER: b) Only 2
GST is an indirect tax levy on manufacture, sale and consumption of goods as well as services at a national level. The decision to keep petroleum out of GST for the time being will also lower the revenue neutral rate (RNR), at which both the Centre and states will not make a loss. Alcohol will also be excluded from GST,
10. Increase in Bank Rate
a) increases the cost of borrowing by commercial banks
b) declines the supply of money
c) shows tightening of RBI monetary policy
d) all the above
ANSWER: d) all the above
Bank rate is the rate at which a central bank is ready to buy or rediscount bills of exchange or other commercial papers. It also signals the medium-term stance of monetary policy. When bank rate is raised, it is expected that all interest rates will move together in the same direction.
11. Which of the following are features of amendments to the Companies Act
1. Removed limit for minimum capital required for formation
2. If a firm fails to repay the deposit or any interest it will be punishable with fine
3. All cases under the Companies Act cannot be tried by a special court and that only serious offenses will go to such courts
Which of the above statements is/are incorrect?
a) 1,2
b) 2,3
c) 1,3
d) All
ANSWER: d) All
12. Consider the following statements
1. The Reserve Bank of India has asked all public sector banks, some private sector and foreign banks to appoint an internal ombudsman.
2. The internal ombudsman would be designated Chief Customer Service Officer (CCSO).
3. RBI has also made it clear that the CCSO should not have worked in the bank in which he/she is appointed as CCSO.
Which of the above statements are true?
a) 1,2
b) 2,3
c) 1,3
d) All the above
ANSWER: d) All the above
All public sector banks will have to appoint a Chief Customer Service Officer.
The private sector and foreign banks which have been asked to appoint the CCSO are ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Standard Chartered Bank, Citi Bank N.A. and HSBC.
The Reserve Bank introduced the Banking Ombudsman Scheme (BOS) in 1995 to provide an expeditious and inexpensive forum to bank customers for resolution of their complaints relating to deficiency in banking services provided by commercial banks, regional rural banks and scheduled primary co-operative banks.
13. Which of the following agency is responsible for management of Chit funds?
a) RBI
b) Central government
c) State governments
d) SEBI
ANSWER: c) State governments
Chit funds in India are governed by the Chit Funds Act, 1982. Under this Act, the chit fund businesses can be registered and regulated only by the respective state governments
14. Consider the following statements related to Bhartiya Mahila Bank
1. It is the only public sector bank in the country entirely owned by the government
2. This bank works exclusively for women
Which of the above statements is/are correct?
a) Only 1
b) Only 2
c) Both
d) None
ANSWER: a) Only 1
Although initially reported as a bank exclusively for women, the bank allows deposits to flow from everyone, but lending will be predominantly for women
15. Consider the following statements related to FDI in retail
1. India allows 100% FDI in single-brand stores but imposed the requirement that the single brand retailer source 30 percent of its goods from India.
2. Government of India allowed 100% FDI in multi-brand retail in India after approval from individual state
Which of the above statements is/are correct?
a) Only 1
b) Only 2
c) Both
d) None
ANSWER: c) Both
Government of India allowed 51% FDI in multi-brand retail in India after approval from individual state
16. Consider the following statements
1. RBI allowed Infrastructure Debt Fund-Non-Banking Financial Companies to invest in public-private partnerships (PPPs) and infrastructure projects which have completed at least one year of satisfactory commercial operation.
2. The maximum exposure that an IDF-NBFC can take on individual projects will be at 50 per cent of its total capital funds.
3. An additional exposure up to 10 per cent could be taken at the discretion of the board of the IDF-NBFC.
Which of the above statements are correct?
a) 1,2
b) 1,3
c) 2,3
d) All
ANSWER: d) All
The RBI could permit additional exposure up to 15 per cent (over 60 per cent) “subject to such conditions as it may deem fit to impose regarding additional prudential safeguards.â€
17. Which of the following benefits from inflation?
a) Lender
b) Borrower
c) Both
d) None
ANSWER: b) Borrower
Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. Inflation redistributes wealth from creditors to debtors so borrower gets benefits from inflation
18. What among the following is NOT an example of 'public goods'?
a) National defense
b) Roads
c) Cars
d) National Forests
ANSWER: c) Cars
Public goods are those goods that cannot be provided by market mechanisms.
19. What among the following is NOT an example of 'private goods'?
a) Clothes
b) Cars
c) Military
d) Food items
ANSWER: c) Military
20 The function of a government to provide goods that cannot normally be provided by market mechanisms between individual customers and producers, is known as:
a) Distribution function
b) Allocation function
c) Stabilization
d) Protection
ANSWER: b) Allocation function
21. The function of a government to fairly share the public's resources is known as
a) Distribution function
b) Allocation function
c) Stabilization
d) Protection
ANSWER: a) Distribution function
22. The function of a government by which it seeks to seek a balance of employment, demand-supply, and inflation, is known as:
a) Distribution function
b) Allocation function
c) Stabilization
d) Protection
ANSWER: c) Stabilization
23. The Government Budget consists of which main component/s?
a) Revenue Budget and Capital Budget
b) Capital Budget only
c) Revenue Budget only
d) None of the above
ANSWER: a) Revenue Budget and Capital Budget
24. Loans raised by the government from the public are known as:
a) Corporate borrowings
b) Common borrowings
c) Market borrowings
d) Private borrowings
ANSWER: c) Market borrowings
25. Whenever the government spends more than it collects through revenue, the resulting imbalance is known as :
a) Public deficit
b) Market deficit
c) Government deficit
d) Budget deficit
ANSWER: d) Budget deficit
26. The idea that government's fiscal policy can be used to stabilize the level of output and employment can be attributed to which of the following economists:
a) Frederich Hayek
b) Ludwig von Mises
c) Frederic Bastiat
d) John Maynard Keynes
ANSWER: d) John Maynard Keynes
John Maynard Keynes's 1936 book, 'The General Theory of Employment, Interest, and Money' laid the foundations for Macroeconomics
27. The deliberate action of the government to stabilize the economy, as opposed to the inherent automatic stabilizing properties of the fiscal system, is known as
a) Forced fiscal policy
b) Manual fiscal policy
c) Discretionary fiscal policy
d) Automatic fiscal policy
ANSWER: c) Discretionary fiscal policy
28. The idea that irrespective of how a government chooses to increase spending, either by debt financing or tax financing, the outcome will be the same and demand will remain unchanged, is popularly known as:
a) Ricardian theory of equivalence
b) Ricardian theory of competitive advantage
c) Ricardian theory of stability
d) None of the above
ANSWER: a) Ricardian theory of equivalence
David Ricardo was a British political economist and his most famous theory was that of comparative advantage (along with above theory of Ricardian equivalence) . Comparative advantage refers to the doctrine that any nation should use its resources solely in industries where it has the most international competitiveness
The theory of Ricardian equivalence, as stated above in the question, was also further developed by Harvard professor Robert Barro who took it much further
29. When was the Fiscal Responsibility and Budget Management Act implemented?
a) 1950
b) 1970
c) 1993
d) 2003
ANSWER: d) 2003
It was enacted in August 2003 that made it obligatory for the government to pursue a prudent fiscal policy through the institutional framework. The rules under FRBMA, 2003 were notified with effect from July, 2004 The Act includes several pro