Smt Kesharbai Lahoti Mahvidyalaya, Amravati

BBA DEPARTMENT
Class :- BBA V Subject :- Indian Economics

1. Which of the following was the major occupation on the eve of independence?
a. Industry
b. Services
c. Agriculture
d. None of these

2. What is the tax or duty on imports called?

a. Tariff
b. Quota
c. Export
d. None of these

3. In which of the following sectors is manufacturing activity included?

a. Primary
b. Tertiary
c. Secondary
d. All of these

4. Which of the following activities is included in the primary sector?

a. Agriculture
b. Services
c. Industries
d. All of these

5. What was the life expectancy at birth in India on the eve of Independence?
a. 44 years
b. 50 years
c. 60 years
d. All of these

6. What was the nature of the Indian economy on the eve of independence?
a. Stagnant
b. Backward
c. Underdeveloped
d. All of these
7. What is another name for the service sector?
a. Tertiary
b. Primary
c. Secondary
d. Agriculture

8. At the time of independence, most of the land was owned by

a. farmers
b. zamindars
c. labour
d. all of these

9. Where was the first iron and steel company established?

a. Kolkata
b. Jamshedpur
c. Patna
d. Ranchi

10. Apart from Cotton which other textile industry saw its advancement in parts of India
during the British rule?
a. Jute
b. Sugar
c. Paper
d. Tea

11. Which of the following ICT initiative of MHRD deal with E-governance for
institutions/universities ?
a. SAMARTH
b. VIDWAN
c. IRINS
d. SWAYAM

12. Which description is appropriate among the following for ‘E-Governance’?

a. To engage, enable and empower the citizens
b. To provide fair and unbiased to the citizens
c. To provide technology-driven governance
d. To ensure people’s faith in E-Commerce applications
13. The use of Information and Communication Technology (ICT) to improve the ability of
government to address the needs of society is known as ___________.
a. E-Business
b. E-Administration
c. E-Governance
d. E-Marketing

14. Regarding E-governance, which of the following statements is/are correct?

(A) Decreasing transparency is an ICT enabled advantage of E-Governance.

(B) E-governance is related to the implementation of ICT in government processes and

functions.

(C) Common Service Centres (CSCs) help in providing and using E-Governance related
services.
Choose the correct option:
a. (A), (B) and (C)
b. (B) and (C) only
c. (A) and (C) only
d. (A) and (B) only

15. When was Make in India programme launched?

a. September 25, 2014
b. October 2, 2015
c. October 11, 2016
d. July 15, 2015

16. Which of the following sector is not covered in the Make in India programme?
a. Automobiles
b. Biotechnology,
c. Media and entertainment
d. Education

17. Make in India programme was launched to improve the ......sector of the Indian economy.
a. Agriculture sector
b. Manufacturing sector
c. Service sector
d. None of the above
18. Which of the following is not the objective of the Make in India programme?
a. To increase the growth of manufacturing sector to 12-14% in order to increase the
sector’s share in the economy.
b. To create 100 million additional manufacturing jobs in the economy by 2022
c. To make India a corruption-free country
d. To increase the share of the manufacturing sector in the GDP of the country
19. Zero Defect Zero Effect" slogan is related to which of the following scheme?
a. Digital India
b. Make in India
c. Startup India
d. Clean India mission
20. Which of the following are the specialized wings of NITI Aayog?
1. Research Wing
2. Consultancy Wing
3. Team India Wing
Select the correct option from the codes given below:
a. Only 1
b. Only 2
c. Only 2 and 3
d. 1 2 and 3

21. Which of the following is correct about NITI Aayog?

a. NITI AAYOG was formed 25th January 2016

b. NITI AAYOG comes under ministry of Commerce and Industry

c. The full form of NITI AAYOG is National Institute for Technical Initiatives

d. NITI AAYOG is policy think tank of government of India

22. On which date, NITI Aayog was established? (Marks: 0)

a. 1st January 2015
b. 5th February 2016
c. 31st July 2014
d. 1st October 2018

23. Which of the following statement is/are correct about the NITI Aayog?
1. The aim of NITI Aayog is to enhance cooperative federalism in the country.
2. The Prime Minister of India is the ex officio Chairperson of the NITI Aayog
3. There are 8 full-time members in the NITI Aayog
Choose the correct option from codes given below:
a. Only 1 and 2
b. Only 2 and 3
c. Only 1 and 3
d. 1,2 and 3
24. NITI Aayog is :-
a. National Institution for Transforming India
b. National And International Transport Institute
c. New India Transformation Initiative
d. New India Transportation Index

25. Which of the following is not a sub scheme under Skill India ?
a. National Skill Development Mission (NSDM)
b. Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
c. Skill Loan Scheme
d. NITI AAYOG

26. Which of the following statements is incorrect?

a. Tax evasion is done by violating provisions of the law.
b. Tax avoidance is done by adhering to the provisions of the law.
c. Tax planning is allowed under the provisions of law.
d. None of the above

27. Which of the following statements is incorrect regarding grey and black market?
a. Illegal goods are traded in both the markets.
b. Goods are traded in these markets in order to avoid taxes.
c. The transactions in both the markets are prohibited under law.
d. None of the above.

28. Consider the following statements about shell companies:

1. Shell companies are always illegal in nature.
2. Shell companies are used by people to evade taxes.
3. Shell companies are not allowed under the Companies Act.
Which of the statements given above is/are correct ?
a. 2 only

b. 2 and 3 only

c. 1 and 3 only

d. 1, 2, and 3

29. Which of the following is a feature of tax haven?

1. tax at low rate
2. Stable environment for investment
3. Secrecy of financial information
Which of the statements given above is/are correct ?
a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 1, 2, and 3
30. Which of the following statements is incorrect with respect to transfer pricing?
a. It is also called base erosion and profit shifting system.
b. It is done by declaring profits in tax havens.
c. It is actually done through a subsidiary company.
d. It is permitted in our legal system, and thus there is no legal remedy to deal with
it.

31. What are “hawala transactions” ?

a. Foreign trade in goods that are banned by the government.
b. Transfer of money without actually moving it.
c. Illegal drug trade at the international level.
d. Conversion of black money into white money.

32. What is money laundering?

a. Money laundering is the process of transferring foreign currency abroad.
b. b) Money laundering is the process of concealing the source of money.
c. c) Money laundering is the process of transferring money to support illegal activities.
d. d) Money laundering is the process of transferring money from tax havens.

33. Which of the following is not Responsible for Parallel Economy :-

a. Increase in Intrest Rates
b. Inflation
c. Funding of political parties
d. Good Governance

34. Which of the following is not an impact of Parallel Economy?

a. Underestimation of GDP
b. Black money
c. Loss of revenue to the state
d. Rise in GNP

35. Which of the following is not an remedy for tackling parallel economy?
a. Checking Tax Evasion
b. Demonetization
c. Voluntary Disclosure Scheme
d. Increase in Tax Rates

36. The first instance of demonetisation in India was on

a. 1945
b. 1947
c. 1946
d. 1949
37. The latest demonetisation event in India took place in
a. 2014
b. 2020
c. 2011
d. 2016

38. Who was the prime minister of India during the demonetisation of 2016?
a. Manmohan Singh
b. Atal Vihari Bajpayee
c. Narendra Modi
d. HD Devegowda

39. The denominations that were taken out of circulation after demonetisation in 2016 were
a. 100, 500 and 1000
b. 500 and 1000
c. Only 1000
d. 100 and 500

40. Which one of the following was one of the objectives of demonetisation in 2016?
a. To gift new notes to people of India
b. To reduce and prevent circulation of black money in the market
c. To increase the interest rate
d. To increase the value of currency

41. Which of the following indicators does not predict but only confirms long-term trends?
a. Lagging Indicator
b. Leading Indicator
c. Coincident Indicator
d. Key Indicators

42. Which of the following is not a leading indicator?

a. Stock Market,
b. Manufacturing Activity
c. Unemployment
d. None of the above

43. Which of the following is not a lagging indicator?

a. Unemployment
b. Balance of Trade
c. Interest Rates
d. Producer Price Index (PPI)
44. Coincident indicators provide valuable information about the _________ state of the
economy.
a. Future
b. Current
c. Past
d. Planned

45. Balance of Trade is

a. Leading Indicator
b. Lagging Indicator
c. Coincident Indicator
d. None of the above

46. Currency Strength is

a. Leading Indicator
b. Lagging Indicator
c. Coincident Indicator
d. None of the above

47. Income and Wages is

a. Leading Indicator
b. Lagging Indicator
c. Coincident Indicator
d. None of the above

48. Producers Price Index ( PPI) is

a. Leading Indicator
b. Lagging Indicator
c. Coincident Indicator
d. None of the above

49. NDP = ________

a. GDP – Depreciation
b. GDP + Net factor income from abroad
c. NNP+ Net indirect taxes
d. All of these

50. Which among the following is not a factor of production?

a. Land
b. Labour
c. Capital
d. Wages
51. Which of the following is not a method to calculate the Gross Domestic Product (GDP)?
a. Product method
b. Income law
c. Expenditure method
d. Diminishing cost method

52. The total amount of income from economic activities across the country in a year is
called ........
a. Disposable income
b. National income
c. Personal income
d. Private Income

53. Which sector contributes the most income to India's economy?

a. Primary sector
b. Secondary sector
c. Tertiary sector
d. None of these

54. Which organisation calculates the Gross Domestic Product for India?
a. Central Statistics Office (CSO)
b. Department of Economic Affairs (DEA)
c. National Sample Survey Office (NSSO)
d. None of the above

55. Which of the following is a part of the Gross National Product (GNP)?
a. Exports
b. Money earned by a resident abroad
c. Imports
d. All of the above

56. The average income of a country is known as _________.

a. Real National Income
b. Per Capita Income
c. Disposable Income
d. None of the above

57. Which of the following is a limitation of the Gross Domestic Product?

a. It fails to indicate the sustainability of a nation’s growth
b. It doesn’t consider the impact of economic activities on human health and the
environment
c. It does not include non-market transactions
d. All of the above
58. Which of the following is not a part of Gross Domestic Product?
a. Life expectancy
b. Public education
c. National defence
d. None of the above

59. Balance of Payments is an accounting statement that records monetary transactions

between ________.
a. Residents of a nation and the rest of the world
b. Non-residents and the rest of the world
c. Residents of a nation and non-residents
d. None of the above

60. Balance of Payments uses the _________ system of accounting.

a. Single-entry
b. Double-entry
c. Cash basis
d. Accrual basis

61. The ‘resident’, whose monetary transactions get recorded under the Balance of Payments
system, includes _______.
a. Government agencies
b. Individuals
c. Firms
d. All of the above

62. The components of a Balance of Payment account are ____________.

a. Capital Account
b. Current Account
c. Both a and b
d. None of the above

63. Balance of trade –

a. is concerned with the trade of visible goods (i.e. material goods)
b. is more thorough as it includes not just visible goods, but also invisible.
c. Both A&B
d. None

64. One of the most significant fiscal policy objectives in India is to bring the revenue
expenditures and receipts to the same level. Which of the following steps will help to
achieve that objective?
a. The efforts to raise the total profits for public sector units
b. The efforts to improve the revenues from tax collection
c. The efforts to slow the growth rate for expenditures in the country
d. All of the above
65. Which of the following agencies is responsible for formulating the Fiscal Policy in India?
a. Securities and Exchange Board of India (SEBI)
b. Reserve Bank of India (RBI)
c. Ministry of Finance, Government of India
d. National Bank for Agricultural and Rural Development (NABARD)

66. Which of the following items is classified as a Capital Receipt in the budget for the
Government of India?
a. The receipts from the collection of income tax
b. The borrowings made by the government from the public
c. The dividends and profits received from the public sector units
d. The interest receipts for loans given by the government to its debtors

67. Which of the following is the definition of a budget deficit?

a. Excess of the total expenditure over the total receipts minus interest payments and
borrowings
b. Excess of the total expenditure over the total receipts minus borrowings
c. Excess of the revenue expenditure over the revenue receipts
d. Excess of the total expenditure over the total receipts

68. Which of the following is a development that can occur as a result of deficit financing?
a. The rise in inflation within the Indian economy
b. The improvement in money supply in the Indian economy
c. The increase in government debt
d. All of the above

69. Which of the following is true about the annual budget prepared by the Government of
India?
a. It is a part of the money-saving policy of the government
b. It is a part of the fiscal policy of the government
c. It is a part of the monetary policy of the government
d. It is a part of the commercial policy of the government

70. The primary purpose of the RBI monetary policy is to maintain:

a. wealth
b. exchange rate
c. growth
d. price stability
71. Which of the following terms indicates a mechanism used by commercial banks for
providing credit to the government?
a. Cash Credit Ratio
b. Debt Service Obligation
c. Liquidity Adjustment Facility
d. Statutory Liquidity Ratio

72. What is the difference between monetary and fiscal policy?

1. The tool used by the central bank to regulate the money supply in the economy is
known as Monetary Policy.
2. The tool used by the government in which it uses its tax revenue and expenditure
policies to affect the economy is known as Fiscal Policy.
3. Monetary policy is administered by the government of the country whereas fiscal
policy is administered by the central bank of the country.
a. 1 only
b. 2 only
c. 1 and 2 only
d. 1 and 3 only

73. If RBI reduces the cash reserve ratio, what will happen to the credit creation?
a. There will be no impact.
b. It will decrease.
c. It will increase.
d. None of the above

74. Main objectives of CRR and SLR is to ensure :

(i) Liquidity position of Bank
(ii) Financial position of Bank.
(iii) Profit position of Bank

a. Only (i) is correct.

b. Only (ii) is correct.
c. Only (iii) is correct
d. All are correct.

75. What is the most widely used tool of monetary policy?

a. Issuing of notes
b. Open market operations
c. Discount rate
d. None of these
76. What is the meaning of Repo Rate?

a. When a bank is in need of cash it can it can discount bills of exchange and avail loan
facilities from the Reserve Bank of India.
b. When a bank has excess cash, they buy securities from RBI against cash on the
condition that they resell the securities to RBI on a pre fixed day and price
c. It is the rate at which RBI allows temporary loan facilities to commercial banks
against government securities on the condition that the bank will repurchase the
securities within a short period.
d. It is a rate that is offered by banks to their most valued customers or prime customers.

77. When the cash reserve ratio (CRR) is increased by the RBI, it will:

a. Increase the supply of money in the economy

b. Decrease the supply of money in the economy
c. No impact on the supply of money in the economy
d. Initially increase the supply but later on decrease automatically.

78. Banking sector comes under which of the following sectors?

a. Manufacturing sector
b. Industrial sector
c. Service sector
d. None of these

79. Open Market Operations means:

a. Sale of agricultural products in the government regulated Mandis.
b. Sale and purchase of bonds and securities to the commercial banks by the RBI.
c. Sale and purchase of bonds and securities by the RBI to the government.
d. Sale and purchase of bonds and securities by the commercial banks to the customers.

80. Which of the following is Quantitative Tool of Monetary Policy?

a. Direct Action
b. Repo Rate
c. Moral Suasion
d. Open Market Operations

Which of the following is Quantitative Tool of Monetary Policy?

Direct Action
Reverse Repo Rate
Moral Suasion
Open Market Operations

Ans Reverse Repo Rate

Which of the following is Qualitative Tool of Monetary Policy?
Repo Rate
Reverse Repo Rate
Directives
Bank Rate

Ans Directives

: If the interest rate decreases in an economy, it will

a) Decrease the investment expenditure in the economy

b) Increase the loan repayment by the government

c) Increase the consumption expenditure in the economy

d) Increase the total savings in the economy

Answer : c

Which agency has the foremost role in regulation of banking sector in India?

a) Reserve Bank of India

b) Union Finance Commission

c) Union Ministry of Finance

d) Union Ministry of Commerce

Answer : a

Lending to which of the following sectors is not a part of priority sector lending?

a) Small-scale industry

b) Housing for poor

c) Allied activities to agriculture

d) Iron and Steel industry

Answer : d
Which of the following is not included in the reserve money?

a) Currency in circulation

b) Banker’s deposits with the RBI

c) Government deposits with the RBI

d) Demand deposit with banks

Answer : d

What is bank rate?

a) Rate on deposits given by commercial banks

b) Rate charged by banks on loans and advances

c) Rate payable on bonds

d) Rate at which the Reserve Bank of India discounts the bills of exchange

Answer : d