Top 550+ Solved Indian Economy MCQ Questions Answer
Q. Convertibility of the rupee implies: [IAS 1994]
a. being able to convert rupee notes into gold
b. freely permitting the conversion of rupee to other major currencies and vice versa
c. allowing the value of the rupee to be fixed by market forces
d. developing an international market for currencies in India
Q. Black money is :
a. counterfeit currency
b. illegally earned money
c. money earned through underhand deals
d. income on which payment of tax is usually evaded
Q. The Issue Department of the RBI maintains a _______ against printing of notes:
a. Minimum Reserve System
b. Proportional Reserve System
c. Proportional Gold Reserve System
d. Proportional Foreign Securities Reserve System
Q. Devaluation of currency by a country is meant to lead to : 1. expansion of import trade 2. promotion of import substitution 3. expansion of export trade
a. 1 only
b. 2 and 3
c. 1 and 2
d. 1 and 4
Q. Which of the following is incorrect about convertibility?
a. The exchange rate should be determined by the forces of demand and supply of the currency
b. The exchange rate' would indicate the strength of the economy
c. It would discourage black market transactions
d. The RBI will be a direct player now rather than being an indirect one
Q. The States' debt does not include:
a. loans from State Bank of India
b. loans from the Central Government
c. Provident Funds
d. treasury bills issued to international financial institutions
Q. Consider the following statement: The price of any currency in international market is determined by the: 1. WTO 2. Demand for goods/services provided by the country concerned 3. Inflation differential between the country concerned and its major trading partners 4. Stability of the government of the concerned country Of these statements:
a. 1, 2, 3, and 4 are correct
b. 1, 2 and 4 are correct
c. 1, 3 and 4 are correct
d. 2, 3 and 4 are correct
Q. Hard Currency is defined as currency:
a. which can hardly be used for international transactions
b. which is used in times of war
c. which loses its value very fast
d. traded in foreign exchange market for which demand is persistently relative to the supply
Q. Consider the following statements:The price of any currency in international market is decided by the [IAS 1998] 1. World Bank 2. Demand for goods/services provided by the country concerned 3. stability of the government of the concerned country 4. economic potential of the country in question Of these statements:
a. 1, 2, 3 and 4 are correct
b. 2 and 3 are correct
c. 3 and 4 are correct
d. 1 and 4 are correct
Q. Inflation implies: [Railways 1994]
a. rise in budget deficit
b. rise in money supply
c. rise in general price index
d. rise in prices of consumer goods
Q. The situation with increasing unemployment and inflation is termed as: [CPO AC 2003]
a. hyperinflation
b. galloping inflation
c. stagflation
d. reflation
Q. Which of the following factors contributes to an inflationary trend?
a. 15% fall in production of industrial goods
b. 15% increase in prices of agricultural products
c. 15% increase in supply of money in the market
d. none of these
Q. Which of the following can be used for checking inflation temporarily?
a. Increase in wages
b. Decrease in money supply
c. Decrease in taxes
d. None of the above