- The ‘Silver Revolution’ in India refers to –
(A) Oilseed production
(B) Egg production
(C) Dairy farming
(D) Irrigation development
Answer: (B)
Explanation: The Silver Revolution in India focuses on increasing egg production, boosting poultry farming to enhance food security and rural incomes, unlike oilseeds (Yellow Revolution) or dairy (White Revolution). - The base year for Wholesale Price Index (WPI) in India (as of the latest revision) is –
(A) 2004–05
(B) 2011–12
(C) 2015–16
(D) 2016–17
Answer: (B)
Explanation: The WPI base year in India is 2011–12, used to track wholesale price changes, aiding inflation analysis, unlike older or newer base years. - Which of the following is not a monetary aggregate classified by RBI?
(A) M1
(B) M2
(C) M4
(D) M6
Answer: (D)
Explanation: RBI classifies monetary aggregates as M1 (currency + demand deposits), M2 (M1 + post office savings), M3 (M1 + time deposits), and M4 (M3 + post office deposits). M6 is not a recognized aggregate in India. - The CRAR (Capital to Risk-Weighted Assets Ratio) norm is prescribed by –
(A) IMF
(B) World Bank
(C) Basel Committee
(D) RBI only
Answer: (C)
Explanation: The Basel Committee sets CRAR norms globally, adopted by RBI for Indian banks to ensure financial stability, requiring a minimum ratio (e.g., 9%) to cover risks. - Which of the following is NOT a function of commercial banks?
(A) Credit creation
(B) Issuing currency
(C) Accepting deposits
(D) Providing loans
Answer: (B)
Explanation: Commercial banks in India, like SBI, accept deposits, provide loans, and create credit, but only RBI issues currency, a central banking function. - India’s largest trading partner (goods) in recent years is –
(A) USA
(B) UAE
(C) China
(D) Japan
Answer: (C)
Explanation: China is India’s largest trading partner for goods, with significant imports (e.g., electronics) and exports (e.g., raw materials), driven by bilateral trade volumes. - “PPP” in economic terms stands for –
(A) Public Policy Programme
(B) Purchasing Power Parity
(C) Private Portfolio Planning
(D) Price Policy Proposal
Answer: (B)
Explanation: Purchasing Power Parity (PPP) compares currencies’ purchasing power, used in India to assess real income differences globally, unlike other acronyms. - The “National Monetisation Pipeline (NMP)” aims to –
(A) Sell PSU shares
(B) Lease existing public infrastructure assets
(C) Reduce fiscal deficit
(D) Monetise agriculture produce
Answer: (B)
Explanation: NMP, launched in 2021, aims to lease public assets like roads and railways to private players, raising funds for India’s infrastructure, distinct from PSU disinvestment. - Which of the following is included in the current account of Balance of Payments?
(A) FDI
(B) FII
(C) Export and import of goods and services
(D) External commercial borrowings
Answer: (C)
Explanation: The current account includes trade in goods and services (e.g., India’s software exports), unlike FDI, FII, or borrowings, which are capital account components. - The headquarters of WTO is located in –
(A) New York
(B) Washington D.C.
(C) Paris
(D) Geneva
Answer: (D)
Explanation: The World Trade Organization’s headquarters is in Geneva, Switzerland, overseeing global trade rules, including India’s commitments since 1995. - The ‘Green Revolution’ was initiated in India during –
(A) First Five-Year Plan
(B) Second Five-Year Plan
(C) Third Five-Year Plan
(D) Fourth Five-Year Plan
Answer: (C)
Explanation: The Green Revolution, starting in the Third Five-Year Plan (1961–66), boosted India’s agricultural productivity through high-yield seeds and irrigation, focusing on wheat and rice. - What is the minimum age to open a Sukanya Samriddhi Yojana account?
(A) 5 years
(B) 10 years
(C) Girl child below 10 years
(D) Girl child below 15 years
Answer: (C)
Explanation: Sukanya Samriddhi Yojana, launched in 2015, allows accounts for girl children below 10 years, promoting savings for their education and marriage in India. - The income tax in India is –
(A) Regressive
(B) Progressive
(C) Proportional
(D) None of the above
Answer: (B)
Explanation: India’s income tax is progressive, with higher rates for higher incomes (e.g., 30% above ₹15 lakh), ensuring equitable burden, unlike regressive or proportional systems. - Which of the following is an outcome of the 1991 economic reforms in India?
(A) Increase in import tariffs
(B) Nationalisation of private firms
(C) Abolishment of license raj
(D) Decrease in FDI
Answer: (C)
Explanation: The 1991 reforms abolished the license raj, reducing industrial licensing, promoting private sector growth in India, unlike higher tariffs or nationalization. - The inflation measured in India for monetary policy purposes is –
(A) WPI
(B) CPI (Combined)
(C) GDP deflator
(D) CPI (Rural)
Answer: (B)
Explanation: CPI (Combined) is used for RBI’s inflation targeting (4% ±2%), reflecting consumer price changes across urban and rural India, unlike WPI or GDP deflator. - Which Five-Year Plan emphasized “growth with social justice”?
(A) Fifth
(B) Seventh
(C) Ninth
(D) Eleventh
Answer: (D)
Explanation: The Eleventh Five-Year Plan (2007–12) focused on growth with social justice, promoting inclusive development through schemes like MGNREGA in India. - The PMFBY (Pradhan Mantri Fasal Bima Yojana) is related to –
(A) Minimum support price
(B) Crop insurance
(C) Soil health
(D) Irrigation
Answer: (B)
Explanation: PMFBY, launched in 2016, provides crop insurance to Indian farmers, protecting against losses from natural calamities, unlike MSP or irrigation initiatives. - The Financial Year in India starts from –
(A) January 1
(B) March 1
(C) April 1
(D) July 1
Answer: (C)
Explanation: India’s financial year begins April 1, aligning budgets and fiscal planning, as seen in annual Union Budget presentations, unlike calendar year starts. - The ‘Bretton Woods Twins’ refers to –
(A) IMF and WTO
(B) World Bank and WTO
(C) IMF and World Bank
(D) IMF and OECD
Answer: (C)
Explanation: The Bretton Woods Twins, IMF and World Bank, established in 1944, support global finance and development, aiding India through loans and policy advice. - What is “Quantitative Easing”?
(A) Reducing fiscal deficit
(B) Increasing taxes
(C) Buying of government securities by central bank to inject liquidity
(D) Selling government securities
Answer: (C)
Explanation: Quantitative easing involves central banks, like RBI, buying securities to inject liquidity, boosting India’s economy during slowdowns, unlike selling securities or fiscal measures. - Which of the following is not a priority sector under RBI’s norms?
(A) Agriculture
(B) MSMEs
(C) Real Estate
(D) Education
Answer: (C)
Explanation: RBI’s priority sector lending includes agriculture, MSMEs, and education, but not real estate, which is not mandated for targeted credit in India. - The “Index of Industrial Production (IIP)” is published by –
(A) RBI
(B) CSO
(C) SEBI
(D) Ministry of Finance
Answer: (B)
Explanation: The Central Statistical Office (CSO), now under NSO, publishes IIP, tracking India’s industrial output (e.g., manufacturing), guiding economic policy. - Which of the following is a component of Aggregate Demand?
(A) Private consumption
(B) Government spending
(C) Net exports
(D) All of the above
Answer: (D)
Explanation: Aggregate demand in India comprises private consumption (e.g., household spending), government spending (e.g., infrastructure), investments, and net exports (exports minus imports). - The headquarters of NABARD is located in –
(A) Hyderabad
(B) New Delhi
(C) Mumbai
(D) Chennai
Answer: (C)
Explanation: NABARD’s headquarters is in Mumbai, supporting rural development through agricultural credit and refinancing, unlike other cities listed. - Which committee is associated with tax reforms in India?
(A) Kelkar Committee
(B) Rangarajan Committee
(C) Gadgil Committee
(D) Rakesh Mohan Committee
Answer: (A)
Explanation: The Kelkar Committee recommended tax reforms, like direct tax simplification and GST groundwork in India, unlike other committees focused on different areas. - FDI inflows are recorded in the Balance of Payments under –
(A) Capital account
(B) Current account
(C) Revenue account
(D) Fiscal account
Answer: (A)
Explanation: FDI inflows, like foreign investments in India’s IT sector, are recorded in the capital account, reflecting long-term investments, unlike current account trade flows. - Repo rate and reverse repo rate are part of –
(A) Fiscal policy
(B) Foreign policy
(C) Monetary policy
(D) Income policy
Answer: (C)
Explanation: Repo and reverse repo rates, set by RBI, are monetary policy tools controlling India’s money supply and inflation, unlike fiscal or foreign policies. - What is a “Zero Coupon Bond”?
(A) Bond with zero maturity
(B) Bond with no interest
(C) Bond sold at face value
(D) Bond with no risk
Answer: (B)
Explanation: A zero coupon bond, issued in India, pays no periodic interest, sold at a discount and redeemed at face value, unlike regular interest-paying bonds. - Which one of the following is not a KYC document?
(A) Aadhaar
(B) PAN
(C) Voter ID
(D) School certificate
Answer: (D)
Explanation: KYC in India requires identity proof like Aadhaar, PAN, or voter ID. School certificates, while personal, are not valid for banking KYC purposes. - A budget that covers only recurring revenue and expenditure is called –
(A) Capital budget
(B) Revenue budget
(C) Deficit budget
(D) Performance budget
Answer: (B)
Explanation: The revenue budget in India covers recurring items like salaries and taxes, unlike capital budgets for assets or deficit budgets reflecting borrowing needs. - The ratio of tax revenue to GDP is known as –
(A) Tax elasticity
(B) Tax buoyancy
(C) Tax to GDP ratio
(D) Fiscal ratio
Answer: (C)
Explanation: The tax-to-GDP ratio measures tax revenue relative to GDP, indicating India’s fiscal capacity (e.g., ~18%), unlike elasticity or buoyancy, which assess responsiveness. - A situation where a worker is employed below his skill level is –
(A) Seasonal unemployment
(B) Structural unemployment
(C) Underemployment
(D) Frictional unemployment
Answer: (C)
Explanation: Underemployment occurs when workers, like engineers driving cabs in India, work below their skill levels, unlike seasonal or structural unemployment types. - What does “FIIs” stand for?
(A) Foreign Institutional Investments
(B) Fiscal Insurance Institutions
(C) Foreign Investment Index
(D) Financial International Institutions
Answer: (A)
Explanation: Foreign Institutional Investments (FIIs) involve foreign entities investing in India’s stock markets, like Sensex, impacting liquidity and rupee value. - The 15th Finance Commission’s chairman was –
(A) C. Rangarajan
(B) N. K. Singh
(C) Y. V. Reddy
(D) Vijay Kelkar
Answer: (B)
Explanation: N. K. Singh chaired the 15th Finance Commission (2017–21), recommending tax devolution to states, shaping India’s fiscal federalism. - If a country imports more than it exports, it has –
(A) Trade surplus
(B) Current account surplus
(C) Trade deficit
(D) Balanced trade
Answer: (C)
Explanation: A trade deficit occurs when imports exceed exports, as India often experiences with oil imports, impacting the balance of payments. - The government sells securities in the open market to –
(A) Control inflation
(B) Reduce taxes
(C) Boost exports
(D) Increase subsidies
Answer: (A)
Explanation: Selling securities, as RBI does in India, absorbs liquidity, controlling inflation by reducing money supply, unlike tax or export policies. - “Inflation-indexed bonds” are meant to –
(A) Hedge investors from inflation
(B) Track stock market
(C) Support mutual funds
(D) Fund foreign debt
Answer: (A)
Explanation: Inflation-indexed bonds in India adjust returns to inflation, protecting investors’ purchasing power, unlike stock market or mutual fund investments. - The Ministry responsible for Census in India is –
(A) Ministry of Home Affairs
(B) Ministry of Finance
(C) Ministry of Statistics
(D) Ministry of External Affairs
Answer: (A)
Explanation: The Ministry of Home Affairs oversees India’s Census, conducted every 10 years, collecting population data, unlike finance or statistics ministries. - A deficit financed by borrowing from RBI leads to –
(A) Deflation
(B) Disinflation
(C) Monetized deficit
(D) Fiscal contraction
Answer: (C)
Explanation: A monetized deficit occurs when the government borrows from RBI, increasing money supply in India, potentially fueling inflation, unlike fiscal contraction. - The GST Council is a –
(A) Constitutional body
(B) Statutory body
(C) Executive body
(D) Judicial body
Answer: (A)
Explanation: The GST Council, under Article 279A, is a constitutional body in India, guiding GST policies and tax rates, ensuring Centre-state coordination. - In India, ‘monsoon economy’ is a term often used for –
(A) Service sector
(B) Industrial sector
(C) Agricultural sector
(D) Export sector
Answer: (C)
Explanation: India’s agricultural sector, reliant on monsoon rains for crops like rice, is termed a monsoon economy, impacting rural livelihoods significantly. - The largest source of internal public debt in India is –
(A) Treasury bills
(B) Market loans
(C) Provident funds
(D) Small savings
Answer: (B)
Explanation: Market loans, like government bonds, form India’s largest internal public debt source, funding fiscal deficits, unlike short-term treasury bills or savings. - The “Twin Deficit” problem in India refers to –
(A) Fiscal and current account deficit
(B) Revenue and capital deficit
(C) Budget and trade deficit
(D) Income and expenditure deficit
Answer: (A)
Explanation: Twin deficits refer to simultaneous fiscal (government borrowing) and current account (trade imbalance) deficits in India, straining economic stability. - Which of the following does not influence demand?
(A) Price of the good
(B) Income of consumer
(C) Availability of substitutes
(D) Fixed cost of production
Answer: (D)
Explanation: Demand is influenced by price, income, and substitutes, as seen in India’s consumer markets. Fixed production costs affect supply, not demand. - A price ceiling is likely to cause –
(A) Surplus
(B) Shortage
(C) Equilibrium
(D) Inflation
Answer: (B)
Explanation: A price ceiling, like on essential goods in India, caps prices below equilibrium, causing shortages as demand exceeds supply, unlike surplus or inflation. - Supply curve slopes upward due to –
(A) Law of diminishing marginal utility
(B) Law of demand
(C) Profit motive
(D) Scarcity
Answer: (C)
Explanation: The upward-sloping supply curve reflects producers’ profit motive, increasing output at higher prices in India, unlike demand or utility laws. - Which of the following is not a method of controlling inflation?
(A) Reducing interest rates
(B) Reducing fiscal deficit
(C) Raising reserve ratios
(D) Selling government securities
Answer: (A)
Explanation: Reducing interest rates boosts money supply, potentially increasing inflation in India, unlike deficit reduction or reserve ratios, which curb inflation. - Marginal cost is –
(A) Cost of producing one extra unit
(B) Total cost divided by output
(C) Fixed cost plus variable cost
(D) Cost at zero output
Answer: (A)
Explanation: Marginal cost is the additional cost of producing one more unit, guiding pricing decisions in Indian firms, unlike total or fixed costs. - The elasticity of supply is zero when –
(A) Supply curve is horizontal
(B) Supply curve is vertical
(C) Quantity supplied rises faster than price
(D) None of the above
Answer: (B)
Explanation: A vertical supply curve indicates zero elasticity, as supply remains fixed regardless of price, like land in India, unlike horizontal curves. - Which of the following is the best indicator of economic development?
(A) GDP
(B) National Income
(C) Per capita income
(D) HDI
Answer: (D)
Explanation: HDI, measuring health, education, and income, is the best indicator of economic development in India, capturing well-being beyond GDP or per capita income.