money supply, banking & financial institutions section 2 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 1 [UPSC (Pre) 2010]

With reference to the institution of Banking Ombudsman in India, which one of the statements is not correct?

a) The Banking Ombudsman can consider complaints from non-resident Indians having accounts in India

b) The service provided by the Banking Ombudsman is free

c) The order passed by the Banking Ombudsman are final and binding on the parties concerned

d) The Banking Ombudsman is appointed by the Reserve Bank of India

Question : 2

If a country is experiencing inflation then what will decrease:

a) The output of goods and services

b) The amount of money needed to purchase a given quantity of goods and services

c) Wage level

d) Purchasing Power

Question : 3

Capitalism is based upon “Laissez-faire system”. What is “Laissez-faire system”?

a) No governmental intervention

b) Role of market forces is minimum

c) Maximum governmental intervention

d) Limited government Intervention

Question : 4 [UPSC (Pre) 1996]

In India, rural incomes are generally lower than the urban incomes. Which of the following reasons account for this?

1. A large number of farmers are illiterate and know little about scientific agriculture.
2. Prices of primary products are lower than those of manufactured products.
3. Investments in agriculture has been low when compared to investment in industry.

a) 1 and 2

b) 2 and 3

c) 1 and 3

d) 1, 2 and 3

Question : 5

A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

a) It is the impact of drastic deficiency in supply due to failure of crops

b) It is the impact of the price levels of previous year on the calculation of inflation rate

c) It is the impact of the surge in demand due to rapid economic growth

d) None of the statements (a), (b) and (c) given above is correct in this context