Practice Quiz set 7 - indian economy mcq Online Quiz (set-1) For All Competitive Exams

Q-1)   When was the NABARD formed?

(a)

(b)

(c)

(d)


Q-2)   Consider the following statements.
  1. Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur, if the accountholders fail to repay dues.
  2. CAR is decided by each individual bank.
Which of the statements given above is/are correct?

(a)

(b)

(c)

(d)


Q-3)   The definition of Wholesale Price Index (WPI) is as follows:
  1. The WPI is a weighted average of indices covering 676 commodities, which are traded in primary, manufacturing and fuel and power-sectors.
  2. It is the retail price average of a basket of goods and services directly consumed by the people.
Choose the correct definition.

(a)

(b)

(c)

(d)

Explanation:

The Wholesale Price Index (WPI) is a weighted average of indices covering 676 commodities, which are traded in primary, manufacturing and fuel and power-sectors.


Q-4)   Certificate of Deposit (CD) and Commercial Paper were introduced by a Bank in March 1989:
  1. Reserve Bank of India
  2. State Bank of India
  3. HDFC Bank
  4. ICICI Bank
Choose the name of the Bank.

(a)

(b)

(c)

(d)

Explanation:

Certificate of Deposit (CD) and Commercial Paper (CP) markets were introduced by Reserve Bank of India in March 1989 in order to widen the range of money market instruments and give investors greater flexibility in the deployment of their shortterm surplus funds.


Q-5)   ______ is set up to promote liquidity to stocks of small and medium enterprises.
  1. Indo Next
  2. Interconnected Stock Exchange of India
  3. Over the Counter Exchange of India
  4. Bombay Stock Exchange
Choose the correct code.

(a)

(b)

(c)

(d)

Explanation:

Indo Next is a new stock exchange, set up to promote liquidity to stocks of small and medium enterprises.


Q-6)   Which of the following measures would result in an increase in the money supply in the economy?
  1. Purchase of government securities from the public by the Central Bank
  2. Deposit of currency in commercial banks by the public
  3. Borrowing by the government from the Central Bank
  4. Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below :

(a)

(b)

(c)

(d)


Q-7)   In the context of Indian economy, consider the following pairs: Term Most Appropriate description
  1. Melt down Fall in stock prices
  2. Recession Fall in growth rate
  3. Slow down Fall in GDP
Which of the pairs given above is/are correctly matched?

(a)

(b)

(c)

(d)


Q-8)   Consider the following statement:
  1. GIC was formed in November 1972.
  2. The 107 private companies operating in the field were grouped together into four - National Insurance Company, United India Insurance Company, Oriental Insurance Company and New India Assurance Company.
Choose the incorrect statement.

(a)

(b)

(c)

(d)

Explanation:

The GIC was formed in November 1972 consequent upon the nationalisation of the general insurance business.

The 107 private companies operating in the field were grouped together into four - National Insurance Company, United India Insurance Company, Oriental Insurance Company and New India Assurance Company, with GIC as the holding company.


Q-9)   What are the causes of inflation?
  1. Increase in demand for goods & services
  2. Decrease in the supply of goods & services
  3. Decrease in demand for goods & services
  4. Increase in the supply of goods & services
Choose the correct code.

(a)

(b)

(c)

(d)

Explanation:

Inflation occurs due to two main factors:

  1. Increase in demand for goods & services,
  2. Decrease in the supply of goods & services


Q-10)   Recently, one of the well known market analysts made this statement: “We expect the Reserve Bank of India to continue to ease liquidity” Which among the following instruments can be used by RBI to continue to ease liquidity?
  1. Cutting the frequency of Open Market Operations
  2. Cutting the Cash Reserve Ratio
  3. Cutting the Repo and Reverse Repo rates
Choose the correct options:

(a)

(b)

(c)

(d)