1) In the Keynes model above, which is independent:
a) Investment b) Consumption c) National income d) Consumption and investment
2) How many motives for demanding money has been given by Keynes: a) 1 b) 2 c) 3 d) 4
3) Recession is associated with fall in: a) Demand b) Supply c) Disinvestment d) Investment
4) Devaluation means: a) Fall in Marginal utility of Money b) Fall in printing of currency c) Risk in black money d) Fall in the value
of money in terms of foreign currency
5) Acute inflationary situation: a) Makes savings in the form of bank deposits less attractive b) Makes savings more attractive c)
Arises due to liquidity trap d) All the above
6) Inflation means: a) Increase in price b) Decrease in value of money c) Boom d) All of the above
7) The problem of unemployment in rural areas is mainly due to: a)Seasonal and under employment b) Frictional unemployment
c) Structural unemployment d) Technical Lriernpleyrnent
8) NNP for a given year can be defined as: a) Market value of final goods only b) The market value of all final goods and services c)
The market value of all final services only d) None of the above
9) LiqUidity preference is the term, which is used to refer to: a) The Reserve Bank of India's shareholdings in other financial
institutions b) The extent to which investors prefer to keep their assets in money c) The community's preference for a goldbacked
currency d) An inducement to save.
10) Which of the following are among the major determinants of the interest rate in the Keynesian theory?
a) People's desire to hold money and to keep their wealth in liquid form b) The available stock of money c) The intensity of
speculation on the stock exchange d) The value of gold and silver on the world's markets
11) The famous book written by J.M. Keynes is entitled: a) Principles of Economics b) Law of Markets c) The General Theory of
Employment, Interest and Money d)None of the above.
12) To a layman, investment means putting his money in a financial asset like bonds, fixed deposit etc. What does it mean to an
economist: a) Purchase of machines b) Stock of durable goods c) Purchase of real capital assets d) All of the above
13) The liquidity preference arises due to: a) Transaction Motive b) Precautionary Motive c) Speculative Motive d) All of these
14) Liquidity trap is likely to result when: a) Rate of Interest at its lowest b) Rate of Interest at its highest c) No change in supply
of money d) When an increase in the supply of money fails to reduce the rate of interest
15) Which theory is called the Neo-Classical theory of rate of interest?
a) Risk Theory b) Liquidity Preference Theory c) a and b d) Loanable Funds Theory.
16) The agency estimating the National Income of India is:
a) Reserve Bank of India b) Planning Commission c) Ministry of Finance d) Central Statistical Organisation
17) The goals of monetary policy do not include a) Maximum output b) Full ernploymeot
c) Price stability ,d) Maximum tax revenue
18) Gross National Product (GNP) is: a) The total output of goods and services produced by the country's economy b) The total
domestic and foreign output claimed by residents of the country c) The sum of gross domestic product and investment d)
National income minus national expenditure
19) If an economy is in equilibrium at the point where plans to save and to invest are equal, then government expenditure must
be: a) Curtailed b) Equal to government income c) Increased d) None of the above
20) Which of the following is correct regarding the gross domestic savings in India?
a) Contribution of corporate sector is largest b) Contribution of government sector is the largest c) Contribution of household
sector is the largest d) None of these
21) NNP (Net National Product) or National Income is the money value of
a) Final goods and services produced annually in the economy b) Annual service generation in the Economy
c) Tangible goods produced annually in the economy d) Tangible goods available in the economy
22) Which of the following is included in the calculation of gross domestic product? a) Personal consumption expenditure b)
Gross domestic investment c) Purchase by the government d) All of the above
23) Gross National Product is greater than gross domestic product when: a) NFI (from abroad) > 0 b) NFI < 0 c) NFI = 0,d) NFI = -1
24) Which of the following is deducted from gross national product in order to estimate net national product?
a) Depreciation b) compensation of employees c) expenditure on buildings d) expenditure on raw material
25) Changes in the standard of living in a country are best reflected in changes in the: a) Social Welfare b) Economic
Welfare c) Per capita income at rent prices d) Per capital income at constant prices
26) Whicl: is the primary indicator to recognise a country's rate of economic growth? a) Increase inter per capita income b)
Setting of more industries c) Rate of growth in national income More exports
27) NationalIncome is based on: a) Total Production x prices b) Rent + wages + Interest,+ Profit c) Domestic Income + NFI d) The
sum of all factor incomes e) All the above
28) Net National Production excludes:
a) Gross Investment b) Netinvestment c) Foreign Investment d) Replacement investment
29) Here are four statements about various national income / expenditure I product relationships. Which one of the following is
true: a) GNP less NIT = NNP b) GNP less NFI = NNP c) GNPplus depreciation = NNP d) GNP less depreciation allowances = NNP
30) The term GDP incorporates the economic activity: a) Taking place within the geographical boundary of the country b) Within
the land territorial c)Within water territorial d) Within air space
31) The term "Hindu rate of growth" refers to the 3.5% per annum growth rate achieved by the Indian economy over the first six
Five-Year Plans. The term was coined by a) Chakravaty b) J.N. Bhagwati c) Raj Krishna d) K.N. Raj
32) Essential services owned and controlled by government is called:
a) Public monopoly b) Public utility c) Public Sector d) All of the above
33) Which of the following is not a fiscal monopoly?
a) Printing of currency b) Minting of coins c) Electricity supply d) None of the above
34) In a planned economy the economic problem of what shall be produced is determined primarily by:
a) Computers deciding what consumers want. b) Direction by the oovernment. c) The pattern of consumer's spending d) The
independent decisions of entrepreneurs.
35) Development means economic growth plus: a) Price stability b) Social change c) Inflation d) Deflation
36) Which Plan recommended Zero-Based Budgeting (ZBB) as a step to control public expenditure?
a) Fifth Plan b) Sixth Plan c) Seventh Plan d) Eighth plan
37) All revenues received, loans raised and money received in repayment of loans by the Union Government go into. a) Public
Account of India b) Contingency Fund in India c) Consolidated fund in India d) none of the above
38) Which one of the following is not directly the concern of the economist? .a) Choices relating to location of a steel plant b)
Bargaining between the workers' unions and the employers c) Effects of a change in money supply. d) Imposition of tax to
discourage cigarette smoking
39) Customs duties, export duties, corporation taxes, taxes on capital value of assets (excluding agricultural land of individuals
and companies) ate: a) Taxes and duties levied by the Centre but wholly appropriated by the States b) Taxes and duties levied by
the Centre but collected by the States c) Taxes and duties that accrue wholly to the Union Government d) Taxes levied and
collected by the Union but which are shared with the States.
40) "Funded debt" means: a) All Government securities which are marketable on the stock exchange market b) All private
securities c) Shares of Companies d) KisanVikasPatras
41) "Annual Financial Statement" is another name of:
a) Balance of payment b) Fiscal Budget, c) Budgetd) Debt & Credit
42) "Multi-Currency Basket" means: a) Relationship with world bank b) Currency + coins c) Number of major international
currencies to which the external value of the Indian rupee is linked d) None of the above
43) Which of the following is not a seiective credit control measure?
a) Rationalizing of Credit b) Open market observations c) Changes in the statutory liquidity ratio d) a and -c
44) Public finance is said to be: a) Science of taxes and pending b) Science of demand and supply of money c) Science of money
and cost d) Science of income and expenditure
45) One of the distinctions between public finance and private finance is that:
a) The State adjusts "income to expenditure' while an individual adjusts "expenditure to income" b) The State maximizes the
general welfare of the public while an individual maximizes his own satisfaction c) The State has no coercive powers while the
individual has d) The State cannot borrow money while the individual can get loans
46) A tax takes away a higher proportion of one's income rise is termed is:
a) Proportional Tax b) Indirect Tax c) Regressive Tax d) Progressive Tax
47 Co orate tax is imposed by:
a) Local Government b) Central Government c) State Government d) Both Central and State Government
48) Which of the following are direct taxes? a) Gift tax b) Income tax c) Corporation tax d) All of the above
49) From the following, which is not a direct tax?
a) Tax on wealth b) Tax on entertainment c) Tax income d) Tax on expenditure
50) An Direct tax is one where: a) Tax is levied always on property b) Points of impact and incidence are different c) Tax is levied
on wealth d) Points of impact and incidence are the same
51) The name of Indirect tax is: a) Income tax b) Sale tax c) Corporate tax d) Wealth tax
52) A regressive tax will tend to redistribute income more: a) Equally b) Equitably c) Unequally d) Inequitably
53) Which of the following does not grant any tax rebate?
a) Indira VikasPatra b) Public Provident Fund c) National Saving Scheme d) National SavingCertificate
54) The Indian Income tax is:
a) Direct and progressive b) Obssessive c) Indirect and proportional d) Direct and proportional
55) Temporary tax levied to obtain additional revenue is called: a) Fee b) Surcharge c) Cess d) Rate
56) Which of the following taxes is/are levied by the Central Govt. and collected appropriated by the States?
a) Estate Duty b) Stamp Duties c) Passenger and goods tax d) Taxes on Newspaper
57) Taxes raised are credited into:
a) Consolidated Fund b) Public Accounts c) Contingency Accounts ,d) Private Accounts
58) Generally tax on production are: a) Indirect taxes b) Both A and B c) Direct taxes d) None of the above
59) Tax on incomes is: a) Indirect b) Both A and B c) Direct d) None of the above
60) Which of the following taxes is levied on services?
a) Personal tax b) Value added tax c) Capital gains tax d) Corporate tax
61) Income tax is raised by:a) Local Government b) Central Government c) Municipality d) State Government
62) Sales tax is levied by: a) Local government b) State government c) Central government d) None of the above
63) Union Excise Duties are a part of Central Government's:
a) Tax revenue b) Capital receipts c) Non-tax revenue d) None of the above
64) All taxes come under: a) Capital receipts b) Revenue receipts c) Public debt d) Both A and C
65) In India, the States gets maximum income from:
a) Sales tax b) State Excise duties c) Land Revenue d) Agricultural Income tax
66) Progressive tax in India is: a) Income tax b) Wealth tax c) Corporate tax d) Sales tax
67) Which of the following is a direct tax? a) Sales tax b) Entertainment tax c) Excise duty d) Estate duty
68) Which of the most important source of revenue to the State Government of India ?
a) Land Revenue b) Agriculture Income-tax c) State excise duties d) Sales tax
69) A budget is the summary of:
a) Proper allocation of resources b) Income reallocation c) Resource reallocation d) Revenue and expenditure
70) The budget deficit refers to the difference between all-revenue and expenditure of: a) Revenue account only b) Increased
government expenditure c) Capital account only d) Both revenue and capital accounts
71) Borrowing from capital market is a part of: a) Revenue budget b) Capital budget c) Both a and b d) None
72) Revenue deficit in India is: a) Negative b) Positive c) Zero d) None of 'he above
73) Capital deficit in India is: a) Positive b) Zero c) Negative d) None of the above
74) Funds, which do not belong to the government, are?
a) Consolidated fund b) Contingency fund c) Public accounts d) None of the above
75) Which budget in India is passed separately? a) Airlines b) Railways c) Defence d) Atomic energy
76) Which one of the following cannot be influenced by budgetary policy? a) Power of private monopolies
b) Balance of trade c) General level of prices d) Regional distribution of employment
77) Which budget is measured in financial terms only?
a) Dominance budget b) Programme performance budget c) Zero-base budget d) Central budget
78) Deficit Financing means: a) Government spends in excess of revenue and capital receipt to that budget deficit in incurred
which is financed by borrowing from the RBI. b) Difference of total expenditure & income revenue from all sources. c) Difference
in borrowing an internal and external resources d) Capital expenditure on items of public construction, public enterprises and
public borrowings.
79) The need for deficit financing in India arises due:
a) Failure of the government to mobilize the desired volume of surplus for the public sector plans. b) The rapidly growing
expenditure incurred by the government c) Neither A nor B. ' d) Both A and B
80) Deficit financing leads to: a) Inflation b) Capital formation c) Neither A nor B ?d) Both A and B
81) Deficit financing means: a) Difference in borrowing and internal and external resources b) Capital expenditure on items of
public construction, public enterprises and public borrowings c) Government spends in excess of revenue and capital receipts so
that budget deficit is incurred which is financed by borrowing from the RBI. d) Difference of total expenditure and income by
revenue from all sources
82) The effect of deficit financing is: a) Never inflationary b) Always inflationary c) Sometimes inflationary and sometimes not so
depending cn conditions of the economy and the dose of deficit financing.d) None of these
83) The direct effect of deficit financing is:
a) Deficit financing leads to extra money supply which in turn pushes up prices b) Demand and supply both increase c) The
price situation comes under complete control dj Deficit financing leads to extra money supply, which in turn makes market more
& more competitive.
84) Fiscal policy is related to: a) Exports and Imports b) Public revenue and expenditure c) Issues and circulation of currencies d)
Monetary Control measures
85) A restrictive monetary-fiscal policy is a good way to deal with:
a) Demand— shift inflation b) Any short of inflation that occurs when the economy falls below full employment c) Demand — pull
inflation d) Cost — push inflation
86) Grants—in-aid given by the Centre to the states is meant: a) To cover the gaps on revenue accounts. b) For flood control c)
Po( boosting agriculture in the State. d) For financing State plan projects
87) The finance commission is appointed every: a) 7 years b) 6 years 'C) 5 years d) 3 years
88) The Narsimham Committee submitted its report to the government on:
a) Depoliticising appointments in public sector undertakes b) Import and Export c) NPA d) Banking structure
89) "Interest is the reward for pure waiting." Which theory of interest explains it? a)Time Preference Theory b) Classical Theory c)
Liquidity Preference Theory d) Loanable Funds Theory
90) What is not true for the Classical theory of interest? a) Demand and Supply Theory b) Saving-Investment Theory c) Nonmonetary
Theory d) Monetary Theory of Interest
91) The Loanable Funds Theory of interest is also known as: a) The neo-classical theory of interest b) The classical theory of
interest c) The real theory of interest d) The modern theory of interest
92) Rate of interest is a function of I, S, M, r = f (I, S, M, L) is explained by which of the following theories? a)Liquidity Preference
Theory b) Saving-Investment Theory c) Loanable Funds Theory d) Modern Theory
93) For which of the following motives for liquidity preference, the demand for liquidity is determined by the rate of interest? a)
Transaction motive b) Precautionary motive c) Speculative motive d) All the three motives.
94) Which of the following is known as monetary theory of interest?
a) Loanable Funds Theory b) Modern Theory c) Liquidity Pi eference Theory d) Saving-Investment Theory
95) What is not true of the modern theory of interest?
a) Neo-Keynesian Theory b) Hicks and Hansen's synthesis c) Monetary Theory d) IS-LM Curves Analysis
96) Which of the following is not a c4Idracteristic of business cycles?
a) Recurrent in nature b) Periodicity c) Regular d) Cumulative
97) Who gave innovation theory of business cycles ? a) Pigou b) .1. A. Hobson c) Schumpeter d) J. Tinbergen
98) Which of the following assumptions is not correct in relation to Hicks' theory of business cycle ?
a) The equilibrium of the economy is influenced by changes in consumption and investment b) Fall employment is the ceiling of
expansion c) Autonomous investment increases at some constant rate even during depression d) Accelerator remains operative
in all phases of business cycle, but the multiplier stops operating during depression
99) Economic growth refers to :
a) An increase in per capita income at current prices b) A sustained increase in per capita output c) An increase in income and
output in real terms and not in money d) An increase in economic welfare
100) National income differs from NNP at market prices by the amount of : a) Current transfers from the rest of the world, b) Net
indirect taxes .9-) National debt interest, d) It does not differA
NSWER
1 A 2 C 3 A 4 D 5 A 6 B 7 A 8 B 9 B 10 C
11 C 12 C 13 D 14 A 15 D 16 D 17 D 18 B 19 B 20 C
21 A 22 D 23 A 24 AA 25 D 26 C 27 E 28 D 29 D 30 A
31 C 32 D 33 C 34 B 35 B 36 C 37 C 38 A 39 C 40 A
41 C 42 C 43 D 44 D 45 A 46 D 47 B 48 D 49 B 50 B
51 B 52 C 53 A 54 A 55 B 56 A 57 A 58 C 59 C 60 B
61 B 62 B 63 A 64 B 65 A 66 A 67 D 68 D 69 D 70 D
71 B 72 A 73 A 74 C 75 B 76 A 77 B 78 A 79 D 80 D
81 C 82 C 83 A 84 B 85 B 86 A 87 C 88 D 89 B 90 D
91 A 92 C 93 C 94 C 95 C 96 C 97 C 98 D 99 B 100 B
a) Investment b) Consumption c) National income d) Consumption and investment
2) How many motives for demanding money has been given by Keynes: a) 1 b) 2 c) 3 d) 4
3) Recession is associated with fall in: a) Demand b) Supply c) Disinvestment d) Investment
4) Devaluation means: a) Fall in Marginal utility of Money b) Fall in printing of currency c) Risk in black money d) Fall in the value
of money in terms of foreign currency
5) Acute inflationary situation: a) Makes savings in the form of bank deposits less attractive b) Makes savings more attractive c)
Arises due to liquidity trap d) All the above
6) Inflation means: a) Increase in price b) Decrease in value of money c) Boom d) All of the above
7) The problem of unemployment in rural areas is mainly due to: a)Seasonal and under employment b) Frictional unemployment
c) Structural unemployment d) Technical Lriernpleyrnent
8) NNP for a given year can be defined as: a) Market value of final goods only b) The market value of all final goods and services c)
The market value of all final services only d) None of the above
9) LiqUidity preference is the term, which is used to refer to: a) The Reserve Bank of India's shareholdings in other financial
institutions b) The extent to which investors prefer to keep their assets in money c) The community's preference for a goldbacked
currency d) An inducement to save.
10) Which of the following are among the major determinants of the interest rate in the Keynesian theory?
a) People's desire to hold money and to keep their wealth in liquid form b) The available stock of money c) The intensity of
speculation on the stock exchange d) The value of gold and silver on the world's markets
11) The famous book written by J.M. Keynes is entitled: a) Principles of Economics b) Law of Markets c) The General Theory of
Employment, Interest and Money d)None of the above.
12) To a layman, investment means putting his money in a financial asset like bonds, fixed deposit etc. What does it mean to an
economist: a) Purchase of machines b) Stock of durable goods c) Purchase of real capital assets d) All of the above
13) The liquidity preference arises due to: a) Transaction Motive b) Precautionary Motive c) Speculative Motive d) All of these
14) Liquidity trap is likely to result when: a) Rate of Interest at its lowest b) Rate of Interest at its highest c) No change in supply
of money d) When an increase in the supply of money fails to reduce the rate of interest
15) Which theory is called the Neo-Classical theory of rate of interest?
a) Risk Theory b) Liquidity Preference Theory c) a and b d) Loanable Funds Theory.
16) The agency estimating the National Income of India is:
a) Reserve Bank of India b) Planning Commission c) Ministry of Finance d) Central Statistical Organisation
17) The goals of monetary policy do not include a) Maximum output b) Full ernploymeot
c) Price stability ,d) Maximum tax revenue
18) Gross National Product (GNP) is: a) The total output of goods and services produced by the country's economy b) The total
domestic and foreign output claimed by residents of the country c) The sum of gross domestic product and investment d)
National income minus national expenditure
19) If an economy is in equilibrium at the point where plans to save and to invest are equal, then government expenditure must
be: a) Curtailed b) Equal to government income c) Increased d) None of the above
20) Which of the following is correct regarding the gross domestic savings in India?
a) Contribution of corporate sector is largest b) Contribution of government sector is the largest c) Contribution of household
sector is the largest d) None of these
21) NNP (Net National Product) or National Income is the money value of
a) Final goods and services produced annually in the economy b) Annual service generation in the Economy
c) Tangible goods produced annually in the economy d) Tangible goods available in the economy
22) Which of the following is included in the calculation of gross domestic product? a) Personal consumption expenditure b)
Gross domestic investment c) Purchase by the government d) All of the above
23) Gross National Product is greater than gross domestic product when: a) NFI (from abroad) > 0 b) NFI < 0 c) NFI = 0,d) NFI = -1
24) Which of the following is deducted from gross national product in order to estimate net national product?
a) Depreciation b) compensation of employees c) expenditure on buildings d) expenditure on raw material
25) Changes in the standard of living in a country are best reflected in changes in the: a) Social Welfare b) Economic
Welfare c) Per capita income at rent prices d) Per capital income at constant prices
26) Whicl: is the primary indicator to recognise a country's rate of economic growth? a) Increase inter per capita income b)
Setting of more industries c) Rate of growth in national income More exports
27) NationalIncome is based on: a) Total Production x prices b) Rent + wages + Interest,+ Profit c) Domestic Income + NFI d) The
sum of all factor incomes e) All the above
28) Net National Production excludes:
a) Gross Investment b) Netinvestment c) Foreign Investment d) Replacement investment
29) Here are four statements about various national income / expenditure I product relationships. Which one of the following is
true: a) GNP less NIT = NNP b) GNP less NFI = NNP c) GNPplus depreciation = NNP d) GNP less depreciation allowances = NNP
30) The term GDP incorporates the economic activity: a) Taking place within the geographical boundary of the country b) Within
the land territorial c)Within water territorial d) Within air space
31) The term "Hindu rate of growth" refers to the 3.5% per annum growth rate achieved by the Indian economy over the first six
Five-Year Plans. The term was coined by a) Chakravaty b) J.N. Bhagwati c) Raj Krishna d) K.N. Raj
32) Essential services owned and controlled by government is called:
a) Public monopoly b) Public utility c) Public Sector d) All of the above
33) Which of the following is not a fiscal monopoly?
a) Printing of currency b) Minting of coins c) Electricity supply d) None of the above
34) In a planned economy the economic problem of what shall be produced is determined primarily by:
a) Computers deciding what consumers want. b) Direction by the oovernment. c) The pattern of consumer's spending d) The
independent decisions of entrepreneurs.
35) Development means economic growth plus: a) Price stability b) Social change c) Inflation d) Deflation
36) Which Plan recommended Zero-Based Budgeting (ZBB) as a step to control public expenditure?
a) Fifth Plan b) Sixth Plan c) Seventh Plan d) Eighth plan
37) All revenues received, loans raised and money received in repayment of loans by the Union Government go into. a) Public
Account of India b) Contingency Fund in India c) Consolidated fund in India d) none of the above
38) Which one of the following is not directly the concern of the economist? .a) Choices relating to location of a steel plant b)
Bargaining between the workers' unions and the employers c) Effects of a change in money supply. d) Imposition of tax to
discourage cigarette smoking
39) Customs duties, export duties, corporation taxes, taxes on capital value of assets (excluding agricultural land of individuals
and companies) ate: a) Taxes and duties levied by the Centre but wholly appropriated by the States b) Taxes and duties levied by
the Centre but collected by the States c) Taxes and duties that accrue wholly to the Union Government d) Taxes levied and
collected by the Union but which are shared with the States.
40) "Funded debt" means: a) All Government securities which are marketable on the stock exchange market b) All private
securities c) Shares of Companies d) KisanVikasPatras
41) "Annual Financial Statement" is another name of:
a) Balance of payment b) Fiscal Budget, c) Budgetd) Debt & Credit
42) "Multi-Currency Basket" means: a) Relationship with world bank b) Currency + coins c) Number of major international
currencies to which the external value of the Indian rupee is linked d) None of the above
43) Which of the following is not a seiective credit control measure?
a) Rationalizing of Credit b) Open market observations c) Changes in the statutory liquidity ratio d) a and -c
44) Public finance is said to be: a) Science of taxes and pending b) Science of demand and supply of money c) Science of money
and cost d) Science of income and expenditure
45) One of the distinctions between public finance and private finance is that:
a) The State adjusts "income to expenditure' while an individual adjusts "expenditure to income" b) The State maximizes the
general welfare of the public while an individual maximizes his own satisfaction c) The State has no coercive powers while the
individual has d) The State cannot borrow money while the individual can get loans
46) A tax takes away a higher proportion of one's income rise is termed is:
a) Proportional Tax b) Indirect Tax c) Regressive Tax d) Progressive Tax
47 Co orate tax is imposed by:
a) Local Government b) Central Government c) State Government d) Both Central and State Government
48) Which of the following are direct taxes? a) Gift tax b) Income tax c) Corporation tax d) All of the above
49) From the following, which is not a direct tax?
a) Tax on wealth b) Tax on entertainment c) Tax income d) Tax on expenditure
50) An Direct tax is one where: a) Tax is levied always on property b) Points of impact and incidence are different c) Tax is levied
on wealth d) Points of impact and incidence are the same
51) The name of Indirect tax is: a) Income tax b) Sale tax c) Corporate tax d) Wealth tax
52) A regressive tax will tend to redistribute income more: a) Equally b) Equitably c) Unequally d) Inequitably
53) Which of the following does not grant any tax rebate?
a) Indira VikasPatra b) Public Provident Fund c) National Saving Scheme d) National SavingCertificate
54) The Indian Income tax is:
a) Direct and progressive b) Obssessive c) Indirect and proportional d) Direct and proportional
55) Temporary tax levied to obtain additional revenue is called: a) Fee b) Surcharge c) Cess d) Rate
56) Which of the following taxes is/are levied by the Central Govt. and collected appropriated by the States?
a) Estate Duty b) Stamp Duties c) Passenger and goods tax d) Taxes on Newspaper
57) Taxes raised are credited into:
a) Consolidated Fund b) Public Accounts c) Contingency Accounts ,d) Private Accounts
58) Generally tax on production are: a) Indirect taxes b) Both A and B c) Direct taxes d) None of the above
59) Tax on incomes is: a) Indirect b) Both A and B c) Direct d) None of the above
60) Which of the following taxes is levied on services?
a) Personal tax b) Value added tax c) Capital gains tax d) Corporate tax
61) Income tax is raised by:a) Local Government b) Central Government c) Municipality d) State Government
62) Sales tax is levied by: a) Local government b) State government c) Central government d) None of the above
63) Union Excise Duties are a part of Central Government's:
a) Tax revenue b) Capital receipts c) Non-tax revenue d) None of the above
64) All taxes come under: a) Capital receipts b) Revenue receipts c) Public debt d) Both A and C
65) In India, the States gets maximum income from:
a) Sales tax b) State Excise duties c) Land Revenue d) Agricultural Income tax
66) Progressive tax in India is: a) Income tax b) Wealth tax c) Corporate tax d) Sales tax
67) Which of the following is a direct tax? a) Sales tax b) Entertainment tax c) Excise duty d) Estate duty
68) Which of the most important source of revenue to the State Government of India ?
a) Land Revenue b) Agriculture Income-tax c) State excise duties d) Sales tax
69) A budget is the summary of:
a) Proper allocation of resources b) Income reallocation c) Resource reallocation d) Revenue and expenditure
70) The budget deficit refers to the difference between all-revenue and expenditure of: a) Revenue account only b) Increased
government expenditure c) Capital account only d) Both revenue and capital accounts
71) Borrowing from capital market is a part of: a) Revenue budget b) Capital budget c) Both a and b d) None
72) Revenue deficit in India is: a) Negative b) Positive c) Zero d) None of 'he above
73) Capital deficit in India is: a) Positive b) Zero c) Negative d) None of the above
74) Funds, which do not belong to the government, are?
a) Consolidated fund b) Contingency fund c) Public accounts d) None of the above
75) Which budget in India is passed separately? a) Airlines b) Railways c) Defence d) Atomic energy
76) Which one of the following cannot be influenced by budgetary policy? a) Power of private monopolies
b) Balance of trade c) General level of prices d) Regional distribution of employment
77) Which budget is measured in financial terms only?
a) Dominance budget b) Programme performance budget c) Zero-base budget d) Central budget
78) Deficit Financing means: a) Government spends in excess of revenue and capital receipt to that budget deficit in incurred
which is financed by borrowing from the RBI. b) Difference of total expenditure & income revenue from all sources. c) Difference
in borrowing an internal and external resources d) Capital expenditure on items of public construction, public enterprises and
public borrowings.
79) The need for deficit financing in India arises due:
a) Failure of the government to mobilize the desired volume of surplus for the public sector plans. b) The rapidly growing
expenditure incurred by the government c) Neither A nor B. ' d) Both A and B
80) Deficit financing leads to: a) Inflation b) Capital formation c) Neither A nor B ?d) Both A and B
81) Deficit financing means: a) Difference in borrowing and internal and external resources b) Capital expenditure on items of
public construction, public enterprises and public borrowings c) Government spends in excess of revenue and capital receipts so
that budget deficit is incurred which is financed by borrowing from the RBI. d) Difference of total expenditure and income by
revenue from all sources
82) The effect of deficit financing is: a) Never inflationary b) Always inflationary c) Sometimes inflationary and sometimes not so
depending cn conditions of the economy and the dose of deficit financing.d) None of these
83) The direct effect of deficit financing is:
a) Deficit financing leads to extra money supply which in turn pushes up prices b) Demand and supply both increase c) The
price situation comes under complete control dj Deficit financing leads to extra money supply, which in turn makes market more
& more competitive.
84) Fiscal policy is related to: a) Exports and Imports b) Public revenue and expenditure c) Issues and circulation of currencies d)
Monetary Control measures
85) A restrictive monetary-fiscal policy is a good way to deal with:
a) Demand— shift inflation b) Any short of inflation that occurs when the economy falls below full employment c) Demand — pull
inflation d) Cost — push inflation
86) Grants—in-aid given by the Centre to the states is meant: a) To cover the gaps on revenue accounts. b) For flood control c)
Po( boosting agriculture in the State. d) For financing State plan projects
87) The finance commission is appointed every: a) 7 years b) 6 years 'C) 5 years d) 3 years
88) The Narsimham Committee submitted its report to the government on:
a) Depoliticising appointments in public sector undertakes b) Import and Export c) NPA d) Banking structure
89) "Interest is the reward for pure waiting." Which theory of interest explains it? a)Time Preference Theory b) Classical Theory c)
Liquidity Preference Theory d) Loanable Funds Theory
90) What is not true for the Classical theory of interest? a) Demand and Supply Theory b) Saving-Investment Theory c) Nonmonetary
Theory d) Monetary Theory of Interest
91) The Loanable Funds Theory of interest is also known as: a) The neo-classical theory of interest b) The classical theory of
interest c) The real theory of interest d) The modern theory of interest
92) Rate of interest is a function of I, S, M, r = f (I, S, M, L) is explained by which of the following theories? a)Liquidity Preference
Theory b) Saving-Investment Theory c) Loanable Funds Theory d) Modern Theory
93) For which of the following motives for liquidity preference, the demand for liquidity is determined by the rate of interest? a)
Transaction motive b) Precautionary motive c) Speculative motive d) All the three motives.
94) Which of the following is known as monetary theory of interest?
a) Loanable Funds Theory b) Modern Theory c) Liquidity Pi eference Theory d) Saving-Investment Theory
95) What is not true of the modern theory of interest?
a) Neo-Keynesian Theory b) Hicks and Hansen's synthesis c) Monetary Theory d) IS-LM Curves Analysis
96) Which of the following is not a c4Idracteristic of business cycles?
a) Recurrent in nature b) Periodicity c) Regular d) Cumulative
97) Who gave innovation theory of business cycles ? a) Pigou b) .1. A. Hobson c) Schumpeter d) J. Tinbergen
98) Which of the following assumptions is not correct in relation to Hicks' theory of business cycle ?
a) The equilibrium of the economy is influenced by changes in consumption and investment b) Fall employment is the ceiling of
expansion c) Autonomous investment increases at some constant rate even during depression d) Accelerator remains operative
in all phases of business cycle, but the multiplier stops operating during depression
99) Economic growth refers to :
a) An increase in per capita income at current prices b) A sustained increase in per capita output c) An increase in income and
output in real terms and not in money d) An increase in economic welfare
100) National income differs from NNP at market prices by the amount of : a) Current transfers from the rest of the world, b) Net
indirect taxes .9-) National debt interest, d) It does not differA
NSWER
1 A 2 C 3 A 4 D 5 A 6 B 7 A 8 B 9 B 10 C
11 C 12 C 13 D 14 A 15 D 16 D 17 D 18 B 19 B 20 C
21 A 22 D 23 A 24 AA 25 D 26 C 27 E 28 D 29 D 30 A
31 C 32 D 33 C 34 B 35 B 36 C 37 C 38 A 39 C 40 A
41 C 42 C 43 D 44 D 45 A 46 D 47 B 48 D 49 B 50 B
51 B 52 C 53 A 54 A 55 B 56 A 57 A 58 C 59 C 60 B
61 B 62 B 63 A 64 B 65 A 66 A 67 D 68 D 69 D 70 D
71 B 72 A 73 A 74 C 75 B 76 A 77 B 78 A 79 D 80 D
81 C 82 C 83 A 84 B 85 B 86 A 87 C 88 D 89 B 90 D
91 A 92 C 93 C 94 C 95 C 96 C 97 C 98 D 99 B 100 B
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