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Prelims
Test Series
GENERAL Economy TEST

STUDIES
Topics: -
1)Economy Definition
2)Basic concept in Economy
3)Types of Economy
4)Sectors of Economy
5)Money and Banking
6)Taxaxtion

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GENERAL Economy Test

STUDIES

Time Allowed: Two Hours Maximum Marks: 200

INSTRUCTION
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in the Box provided alongside. DO NOT writes anything
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4. This Test Booklet contains 100 items (questions). Each item is printed in English. Each item comprises
four responses (answers). You will select the response which you want to mark on the Answer Sheet. In
case you feel that there is more than one correct response, mark the response which you consider the best.
In any case, choose ONLY ONE response for each item
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concluded, you should hand over to the Invigilator only the Answer Sheet. You are permitted to take away
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9. Sheets for rough work are appended in the Test Booklet at the end.
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THERE WILL BE PENALTY FOR WRONG ANSWERS MARKED BY A CANDIDATE IN THE
OBJECTIVE TYPE QUESTION PAPERS.
(i) There are four alternatives for the answer to every question. For each question for which a
wrong answer has been given by the candidate, one-third of the marks assigned to that question
will be deducted as penalty.
(ii) If a candidate gives more than one answer, it will be treated as a wrong answer even if one of
the given answers happens to be correct and there will be same penalty as above to that
question.
(iii) If a question is left blank, i.e., no answer is given by the candidate, there will be no penalty for
that question.

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1. With reference to the Goods and Services Tax 2. Increased government spending on large-scale
Council (GST Council), consider the following projects
statements: 3. High economic growth
1. The 100th Amendment Act of 2016 added a new How many of the above situations can lead to inflation?
Article 279-A giving the President the authority to (a) Only one (b) Only two (c) All three (d) None
appoint a GST Council.
2. One-half of the members constitute the quorum and 9. Which of the following statements is correct about the
the decision is taken by a majority of not less than three- Foreign Direct Investment (FDI) and Foreign Portfolio
fourths of the members present and voting. Investment (FPI)?
3. Any act of the Council will not become invalid on any (a) Foreign investment greater than 10 percent of the paid-
vacancy or defect in the constitution of the Council. up capital of a company can be considered as the FDI.
How many of the above statements are correct? (b) FDI is more liquid asset for an investor than FPI.
(a) Only one (b) Only two (c) All three (d) None (c) FPI investors are active investors and take controlling
positions in domestic firms.
2.Which of the following is a systematic record of all the (d) All the statements (a), (b) and (c) are correct.
economic transactions between one country and rest of
the world. 10. Buyers and sellers of foreign exchange are
(a) Balance of trade (b) Balance of transactions (a) central banks (b) commercial banks
(c) Budget (d) Balance of payments (c) Brokers (d) all of above

3.Consider the following statements: 11. In the context of the functions of the central bank,
1. Higher interest rate leads to lesser demand of money. the Reserve Bank of India carries out sterilization to
2. Interest rate is decided by the Central Government. (a) protect the commercial banks from the rising non-
Which of the statements given above is/are correct? performing assets (NPA).
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 (b) stabilize the stock of money in the economy from
external shocks.
4.Money is (c) prevent the circulation of black money.
(a) anything that is generally accepted in payment for goods (d) invalidate the licenses of banks violating the banking
and services or in the repayment of debt. rules.
(b) frequently but incorrectly used synonymously with
wealth. 12.Consider the following statements about the Statutory
(c) paper money, coins, and checks. Liquidity Ratio (SLR):
(d) all of the above. 1. SLR can be maintained in Cash, Gold, or Government
Securities.
5.Consider the following statements with reference to 2. SLR Reserves are kept with the Bank itself and not
inflation: with the RBI.
1. Inflation reduces the purchasing power of the Which of the statements given above is/are correct?
currency. (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
2. Producers are worst affected by inflation.
Which of the statements given above is/are correct? 13. In order to arrive at the market price of the product,
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 which of the following are added to the factor cost of the
product?
6. Reduction in the value of domestic currency through 1. Total direct taxes
market forces is called …………. 2. Total indirect taxes
(a) depreciation (b) devaluation 3. Total subsidies
(c) revaluation (d) appreciation Select the correct answer using the code given below.
(a) 1 only (b) 2 only (c) 2 and 3 only (d) 1, 2 and 3
7.Who among the following was appointed the head of
the first committee to design a GST model? 14.Consider the following statements about the
(a)Vijay Kelkar (b) Asim gupta Monetary Policy Committee:
(c) Pranab Mukherjee (d) V.P. Singh 1. It seeks to set targets for inflation in India
2. Governor of the RBI is the ex-officio Chairperson of
8. Consider the following situations in an economy: the Committee.
1. Surge in Exports Which of the statements given above is/are not correct?
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(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 (a) increases (b) decreases
(c) remains constant (d) None of them
15. A decision of the Reserve Bank of India to increase
the Cash Reserve Ratio (CRR) is most likely to result in 22. Monetary Policy or credit control of the Central
(a) an increase in the inflation rate. Bank of a country (RBI) are broadly classified as:
(b) an increase the interest rates. 1. Bank Rate
(c) an increase the aggregate demand for goods. 2. Repo rate
(d) a decrease in household savings. 3. Reverse Repo rate
4. Open Market Operations (OMO)
16. why public goods must be provided by the Choose the correct given code from the following.
government? (a) 1&2 (b) 2 & 4 (c) 1,2&3 (d) all of the above
Assertion: people receives benefits from public goods but
do not pay for them 23. State the components of supply of money.
Reason: Such a goods can only prepared by government 1. Coins and currency notes with public.
Choose the correct given code from the following. 2. Demand deposits with banks.
(a) assertion is wrong but reason is correct Choose the correct given code from the following.
(b) assertion is correct but reason is wrong (a) 1 only (b) 2 only (c) both 1&2 (d) neither 1 nor 2
(c) both assertion and reason is correct
(d) assertion & reason are correct individually, but it is not 24. Which one of the following statements is correct?
the reason of assertion (a) If national income rises, per capita income must also rise
(b) If population rises, per capita income must fall.
17. Increase in the value of domestic currency by the (c) If national income rises, welfare of the people must rise.
government is called (d) None of them
(a) depreciation (b) devaluation
(c) revaluation (d) appreciation 25. Consider the following statements regarding the
GDP:
18. which of the following statement is not true for fiscal 1. It reflects the prices of all domestically produced
deficit? goods and services in the economy.
(a) represents the borrowing of the government. 2. GDP is calculated by the Department of Expenditure
(b) is the difference between total expenditure and total under the Ministry of Finance.
receipts of the government. Which of the statements given above is/are correct?
(c) is the difference between total expenditure and total (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
receipts other than borrowing.
(d) increases the future liability of the government 26. With reference to the inflation, consider the following
statements:
19. Direct tax is called direct because it is collected 1. Deflation is the decrease in the level of inflation.
directly from: (Choose the correct alternative) 2. Disinflation is a general decline in prices for goods and
(a) The income earners services.
(b) The sellers on goods sold Which of the statements given above is/are correct?
(c) The buyers of goods (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
(d) The producers on goods produced
27. Which of the following are the objectives of
20. The various monetary policy measures that can the Reserve Bank of India?
increase aggregate demand, and thus, control the 1. Ensuring adequate flow of credit to productive sectors
problem of deficient demand are: of the economy
(a) A mix of reducing government expenditure and 2. Maintaining financial stability
increasing tax rates 3. To facilitate external trade
(b) Reduction in bank rate. 4. To give the public an adequate quantity of supplies of
(c) Sale of government securities in the open market by the coins
central bank. Select the correct answer using the code given below.
(d) Increasing the amount of taxes. (a) 1 and 4 (b) 1, 2 and 3 (c) 2, 3 and 4 (d) 1, 2, 3 and 4

21. If in an economy investment is greater than saving,

national income of the economy,
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28. In the context of monetary policy, which of the (a) Depreciation (b) National Income
following are qualitative tools used by the Reserve Bank (c) Wealth (d) Import
of India?
1. Margin requirements 35. Which of the following are direct taxes?
2. Moral suasion 1. Wealth tax
3. Changing the SLR (Statutory Liquidity Ratio) 2. Gift tax
Select the correct answer using the code given below. 3. Excise duty
(a) 2 only (b) 1 and 2 only (c) 1, 2 and 3 (d) None 4. Corporation tax
Select the correct answer using the code given below.
29. Which of the following is not used to calculate (a) 1, 2, and 4 (b) 2 and 3 (c) 1, 3, and 4 (d) 1, 2, 3 and 4
national income?
(a) Expenditure method (b) Product method 36. Consider the following statements regarding the
(c) Balance of Payment method (d) Income method inflation targeting in Indian economy:
1. Inflation targeting is a statutory and institutionalized
30. Consider the following statements: framework under the RBI Act, 1934.
1. Production taxes and subsidies are independent of the 2. Inflation target is set up by the RBI in consultation
volume of production. with the central government.
2. Product taxes and subsidies are paid pair or received Which of the statements given above is/are correct?
per unit product. (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 37. Which of the following statements is correct
about the Balance of Payments?
31. With reference to the Marginal Standing Facility (a) It is a record of only goods and services exchanged
(MSF), consider the following statements: between the residents of a country with the rest of the world.
1. Its aim is to reduce volatility in the overnight lending (b) It is a systematic record of all economic transactions
rates in the interbank market. between the residents of one country and the rest of the
2. Borrowing rate under this facility is always higher world.
than the repo rate. (c) It includes transactions consisting of imports and exports
3. The facility was introduced by the Reserve Bank of of goods, services, and capital but excludes foreign aid and
India during the 2016 demonetization. remittances.
Which of the statements given above is/are correct? (d) It includes all the domestic assets and liabilities of the
(a) 1 only (b) 2 only (c) 1 and 2 only (d) 1, 2 and 3 government of India, kept by RBI.

32. Which of the following financial institutions in India 38. It reflects people’s preference for liquidity and is a
are required to maintain the Statutory Liquidity Ratio purely behavioral parameter that depends, among other
(SLR) norms? things, on the seasonal pattern of expenditure. Which of
1. Regional Rural Banks the following ratios has been described in the passage
2. Local Area Banks given above?
3. Co-operative Banks (a) Currency Deposit Ratio (b) Reserve Deposit Ratio
4. Small Finance Banks (c) Statutory Liquidity Ratio (d) Cash Reserve Ratio
Select the correct answer using the code given below.
(a) 1 Pair (b) 2 Pairs (c) 3 Pairs (d) 4 Pairs 39. Consider the following statements:
Statement-I: The RBI Governor is not a member of the
33. Consider the following statements: Monetary Policy Committee.
1. An increase in the GDP always leads to the welfare of Statement-II: The Monetary Policy Committee replaced
people. the RBI Governor as the authority for inflation
2. Negative externalities are not considered while targeting.
calculating GDP Which one of the following is correct in respect of the
3. Non-monetary exchanges are not registered as part of above statements?
economic activities in GDP calculation. (a) Both Statement-I and Statement-II are correct and
Which of the statements given above are correct? Statement-II is the correct explanation for Statement-I.
(a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) 1, 2 and 3 (b) Both Statement-I and Statement-II are correct and
Statement-II is not the correct explanation for Statement for
34. Which of the following is not a flow variable? Statement-I.
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(c) Statement-I is correct but Statement-II is incorrect 2. A country having a balance of payments equilibrium
(d) Statement-I is incorrect but Statement-II is correct will experience an increase in foreign exchange reserves.
Which of the statements given above is/are correct?
40. Consider the following statements regarding the (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
unorganized sector in India:
1. In the unorganized sector, the maximum number of 46. With reference to the different systems of taxation,
workers employed in an enterprise is fifty. consider the following statements:
2. The term ‘unorganized worker’ is not defined in India 1. The percentage tax rate increases proportionally with
under any act of government. the increase in the income under the Proportional
Which of the statements given above is/are correct? Taxation Regime.
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 2. A proportional income tax makes disposable income
as well as consumer spending more sensitive to
41. If the Reserve Bank of India (RBI) increases the fluctuations in GDP.
bank rate, what effects it could possibly have on the Which of the statements given above is/are correct?
Indian economy? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
1. Loan taken by the commercial banks becomes
cheaper. 47. Consider the following statements regarding a
2. It decreases the money supply in the economy. socialist economy:
Select the correct answer using the code given below. 1. In a socialist economy, the government decides what
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 goods are to be produced.
2. Distribution of resources under socialism is supposed
42. While calculating the Gross Domestic Product (GDP) to be based on the purchasing power of the people.
by expenditure method, which of the following factors Which of the statements given above is/are correct?
are considered? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
1. Final household consumption expenditure
2. Expenditure on intermediate goods 48. Which of the following are functions of the Central
3. Final capital expenditure Bank (RBI) in the Indian economy?
4. Government expenditure on unemployment allowance 1. It issues the currency of the country.
Select the correct answer using the code given below. 2. It controls the money supply of the country.
(a) 1 and 4 (b) 1, 3 and 4 (c) 1 and 3 (d) 2, 3 and 4 3. It is the custodian of the foreign exchange reserves of
the economy.
43. A rise in the price of foreign exchange (a fall in the 4. It acts as a bank to the banking system in the
value of rupee) would likely result in which one of the economy.
following? Select the correct answer using the code given below.
(a) Decrease the cost (in terms of rupees) of purchasing a (a) 1, 2 and 3 (b) 1, 3 and 4 (c) 2 and 4 (d) 1, 2, 3 and 4
foreign good.
(b) Increase the cost (in terms of rupees) of purchasing a 49. Consider the following statements regarding the open
foreign good. market operations done by the Reserve Bank of India
(c) Decrease in India’s exports with other things remaining (RBI):
constant. 1. It refers to buying and selling of the bonds issued by
(d) Both (b) and (c) the Government in the open market.
2. Purchase of government securities from the bond
44. With reference to Consumer Price Index (CPI), market by the RBI, increases the high powered money in
consider the following statements: the economy.
1. The CPI takes into account the prices of goods only. Which of the statements given above is/are correct?
2. It includes the prices of imported goods. (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Which of the statements given above is/are correct?
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 50. With reference to Inflation-Indexed Bonds, Consider
the following statements:
45. Consider the following statements regarding 1. The Inflation-Indexed Bonds provide protection only
Balance of Payments (BoP): to principal and not to interest payments.
1. The BoP of a country comprises transactions between 2. Inflation-Indexed Bonds are treated as G-Secs and are
residents and nonresidents during a period. thus eligible to be kept as part of the Statutory Liquidity
Ratio requirements of banks.
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Which of the statements given above is/are correct? 4. Transfer payment to the household from the
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 government and firms
Select the correct answer using the code given below.
51. In the context of core inflation, consider the following (a) 1 and 4 (b) 1, 2 and 3 (c) 2, 3 and 4 (d) 1, 2, 3, and 4
statements:
1. It considers changes in the price of food and energy. 57. With reference to the term ‘spread’ in banking
2. When core inflation rises, the Reserve Bank of India system, which one of the following statements is correct?
(RBI) increases its key policy rates to suck excess (a) It is the rate charged by the central bank for lending
liquidity from the market; funds to commercial banks.
Which of the statements given above is/are correct? (b) It is the rate at which the central bank of a country lends
(a) 1 only (b) 2 only (c) Both1 and 2 (d) Neither 1 nor 2 money to commercial banks in the event of any shortfall of
funds.
52. With reference to Treasury Bills (T-Bills), which one (c) It is the difference between the interest rates of
of the following statements is correct? borrowers and depositors in a bank.
(a) They are short term capital market instruments. (d) It is a specified minimum fraction of the total deposits of
(b) In India, T- Bills are issued only by the central customers, which commercial banks have to hold as
government. reserves with the central bank.
(c) T- Bills are considered as assets of the government.
(d) Foreign Portfolio Investment (FPI) is not allowed in 58. With reference to the factor cost, consider the
Treasury Bills. following statements:
1. Factor cost includes the payments to the factors of
53. Which of the following state-level taxes have been production only.
subsumed under Goods and Service Tax (GST)? 2. Factor cost does not include any tax.
1. Luxury tax Which of the statements given above is/are not correct?
2. Sales tax (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
3. Stamp duty
4. Octroi 59. Consider the following statements regarding the
Select the correct answer using the code given below. types of economic systems:
(a) 1 and 3 (b) 2, 3 and 4 (c) 1, 2, 3 and 4 (d) 1, 2 and 4 1. In a market economy, market provides the goods and
services it produces well while the government takes care
54. Which of the following is/are considered as assets of a of essential goods and services.
commercial bank? 2. Distribution under socialism is based on what people
1. Reserves of commercial banks with the Central Bank need and not on what they can afford.
2. Deposits of people with the commercial bank Which of the above statements is/are correct?
3. Loans given to the public by the commercial bank (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
Select the correct answer using the code given below.
(a) 1 and 2 (b) 2 (c) 1 and 3 (d) 2 and 3 60. Consider the following statements regarding the
monetary policy committee:
55. With reference to the Monetary Policy Committee 1. Each member of the MPC has one vote and only the
(MPC), consider the following statements: RBI Governor has a second or casting vote.
1. The committee was set up with the responsibility for 2. The MPC is required to meet at least two times in a
price stability and inflation targeting. year.
2. Its meetings are chaired by the Finance Minister. Which of the above statements is/are correct?
3. The committee is constituted under the Reserve Bank (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
of India Act, 1934.
Which of the statements given above are correct? 61. Consider the following statements regarding
(a) 1 and 2 (b) 1 and 3 (c) 2 and 3 (d) 1, 2, and 3 Central Bank Digital Currencies (CBDCs):
1. CBDC is a digital fi at currency that can be used to
56. In order to calculate Personal Income (PI), which of settle a public or private debt or meet a fi nancial
the following is required to be subtracted from the obligation.
National Income (NI)? 2. They must be based on distributed ledger technology.
1. Undistributed Profit 3. India recently launched e-RUPI as its first CBDC.
2. Net interest payments made by households Which of the above statements is/are incorrect?
3. Corporate tax (a) 1 and 2 (b) 2 and 3 c) 3 (d) None of the above
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62. Which among the following is/are considered as the asset (a) 1, 2 and 3 (b) 1, 3 and 4 (c) 2 and 4 (d) 1, 2, 3 and 4
of Reserve Bank of India (RBI)?
1. Loan given to the banks 69. With reference to the taxation system in India,
2. Bankers deposit to RBI consider the following statements:
3. Government Securities 1. In case of Direct Tax, the person bearing the tax and paying
Select the correct answer using the code given below: the tax are the same whereas; in Indirect Tax, the person
(a) 1 and 2 only (b) 2 only bearing the tax and paying the tax are not the same.
(c) 1 and 3 only (d) 2 and 3 only 2. Direct tax is levied on income whereas; indirect tax is levied
on the sale/purchase of goods/services.
63. Consider the following statements about the Micro ATMs: Which of the statements given above is/are correct?
1. These are card swipe machines through which banks can (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
remotely connect to their core banking system.
2. It has connectivity through Global System for Mobile 70. Which of the following statements is/are correct?
(GSM) communication; hence it can travel from village to 1. It is a general trend that the economic growth of the country
village. drives out the labor force from the agriculture sector to the
Which of the above statements is/are correct? non-agriculture sector.
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 2. In India, this transition is much faster as compared to
major developing countries like Brazil, China, Malaysia, etc.
64. Which of the following are the state collected taxes that due to larger growth in service sectors.
have been subsumed under Goods and Services Tax Select the correct answer using the following code:
1. Countervailing Duty 2. Central Sales Tax (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
3. Taxes on lottery, betting and gambling 4. Luxury tax
Select the correct answer using the code given below: 71. Which of the following does not constitute the primary
(a) 1 and 2 (b) 2, 3 and 4 (c) 3 and 4 (d) 1, 2, 3 and 4 factor responsible for agriculture being low on the
technological end in India?
65. In which of the following matters, the Reserve (a) The small size of the landholdings
Bank of India regulates the commercial banks? (b) Dependence on monsoon for irrigation
1. Resolution mechanism (c) Low investment
2. Corporate governance in banks (d) Lack of robust insurance policy and its fruitful implementation
3. Policy issues relating to customer service
4. Governing foreign banks entry and expansion 72. Consider the following statements regarding
Select the correct answer using the code given below: the privatization of the public sector enterprises:
(a) 1 and 4 (b) 2, 3 and 4 (c) 1, 2 and 3 (d) 1, 2, 3 and 4 1. Privatization is the liquidation of government’s equity
2. The purpose of the privatization is generally to improve fi
66. Which of the following statements is/are correct regarding scal health of the government along with modernization of the
the Standing Deposit Facility Scheme (SDFS)? firm.
1. It enables the RBI to manage excess liquidity in the Which of the above statements is/are correct?
economy. (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
2. It is available only against the issuance of collateral by RBI
to the Banks. 73. Which of the following statements is/are
3. SDF will enable banks to park excess liquidity with the correct?
Reserve Bank at their discretion. 1. A currency issued by a government of a nation that shows
Select the answer using the code given below: less fluctuation in its exchange rate is also called as hard
(a) 1 (b) 1 and 3 (c) 2 and 3 (d) 1, 2 and 3 currency.
2. The currency of an import surplus country is more
67. Which of the following are the likely effects of likely to become hot currency, as a result of its inflow in
contractionary fi scal policies in developing countries like the market due to large imports made by the country.
India? 3. Indian Rupee can be referred to as one of the soft-
1. Increase in infl ation rate
currency.
2. Decrease in the employment rate
3. Decrease in Fiscal Defi cit Select the correct answer using the following code:
4. Slowdown in economic activities (a) 1 and 2 (b) 2 (c) 1 and 3 (d) 1, 2 and 3
Select the correct answer using the code given below:
(a) 1 and 4 (b) 2 and 3 (c) 2, 3, and 4 (d) 1, 2, 3 and 4 74. Which of the following are the fiscal policy measures taken
by the government to control inflation?
68. Which of the following is a fiscal policy tool in India? 1. Reduction in public expenditure and public borrowing.
1. Goods and Services Tax 2. Repo rate 2. Increasing taxes on private businesses
3. Corporate tax 4. Public infrastructure spending 3. Increasing interest rates in the economy.
Select the correct option using the code given below: Select the correct answer using the code given below.

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(a) 1 and 2 (b) 2 and 3 (c) 1 and 3 (d) 1, 2 and 3 81. Which of the following would be included as part of the
Indian GDP?
75. Gross National Product is obtained from the 1. Salary of a citizen of India working in the US.
Gross Domestic Product by adjusting it for 2. Profits earned by a German company operating in India.
(a) Net Indirect taxes (b) Depreciation 3. Profits earned by an Indian company operating in Japan.
(c) Inflation (d) Net factor income from abroad Select the correct answer using the code given below.
(a) 1 (b) 2 (c) 2 and 3 (d) 1 and 2
76. Consider the following statements with reference to
indirect and direct taxes in India: 82. Consider the following statements regarding Goods and
1. In the case of direct taxes, the incidence and impact of the Services Tax (GST):
tax are on the same person. 1.It aims to improve the Value Added Tax on Goods and
2. Indirect taxes are regressive in nature. Services
3. While Income Tax is a type of direct tax, corporate tax is a 2.It can be imposed differently in different States
type of indirect tax. 3.It is a Comprehensive Tax imposed nationwide irrespective
Which of the statements given above is/are correct? of any State concerned
(a) 3 (b) 2 and 3 (c) 1 and 2 (d) 1, 2 and 3 4.It is a significant step in the reform of Indirect Taxation in
India.
77. Which of the following changes need to be made to Select the correct answer using the code given below.
Net National Product at market prices in order to obtain (a)1, 2 and 3 (b)2 and 3 (c)1, 3 and 4 (d)3 and 4
Net National Product at factor cost?
83. Consider the following statements, with respect to reserve
(a) Add indirect taxes and subsidies
bank of India’s (RBI) monetary policy:
(b) Deduct indirect taxes and subsidies 1.RBI has responsibility to maintain the inflation target within
(c) Add indirect taxes and deduct subsidies the bandwidth of 4+/-2 percentage of consumer price index.
(d) Deduct indirect taxes and add subsidies 2.In case of failure to maintain the target for any four
consecutive quarters, RBI have to send report to central
78. Consider the following statements in the government.
context of Goods and Services Tax (GST): Select the correct answer using the code given below:
1. GST is essentially a tax only on value addition at each (a)1 (b)2 (c)Both 1 and 2 (d)Neither 1 nor 2
stage.
2. It is a destination-based tax. 84. Which of the following statements regarding the digital
rupee, or the e-rupee is Incorrect?
3. State GST (SGST) would be applicable
(a)It is a central bank digital currency issued by the central bank of
only if both the buyer and seller are located within the India, RBI.
same state. (b)It has to be accepted by everyone in India as a medium of
Which of the statements given above is/are correct? exchange.
(a) 1, 2 and 3 (b) 2 (c) 3 (d) 1 and 2 (c)As per RBI, the e-rupee will be kept in digital wallets overseen
by RBI, which will accrue interest at the prevailing savings bank
79. Which of the following can be considered as liabilities account interest rate.
for the Reserve Bank of India? (d)Deposits held in banks can be converted into digital rupees and
1. Gold reserves vice-versa.
2. Currency notes held by Public
85. Goods and Services Tax, GST Council is heady by:
3. Loan to Commercial Banks
(a) Prime Minister (b) SEBI chairman
4. Investments in Government Securities (c)RBI governor (d)Union Finance minister
Select the correct answer using the code given below.
(a) 1 (b) 2 and 3 (c) 2 and 4 (d) 2 86. Which of the following taxes are included in the Direct
Tax?
80. Which of the following is/are correct with regard to Gross 1. Corporate Tax 2. Securities Transition Tax
domestic product (GDP) of a country? 3. Personal Income Tax
1. It is the sum total of the value of goods and services created Select the correct answer using the code given below.
within the geographical boundary of a country in a particular (a)1 and 2 (b)2 and 3 (c)1 and 3 only (d)1, 2 and 3
year.
2. Non-monetary exchanges such as barter exchange are not 87. Consider the following statements regarding the
included in the GDP estimation. unorganized sector in India:
3. A rise in GDP indicates that all the residents of the country 1. In the unorganized sector, the maximum number of
are better off today than in the past. workers employed in an enterprise is fifty.
Select the correct answer using the code given below. 2. The ‘unorganized worker’ have a job security.
(a) 1 (b) 2 and 3 (c) 1 and 2 (d) 1 and 3 Which of the statements given above is/are correct?

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(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 (a) 1934 (b) 1935 (c) 1937 (d) 1939

88. Which of the following are the potent advantages of e- 96. Who will appoint the RBI governor
Rupee (a) Finance minister (b) Prime minister
1. Reduction in operational costs of RBI involved in physical (c) President (d) None of the above
cash management
2. It will promote financial inclusion. 97. The word legal tender means in term of economy
Which of the statements given above is/are correct? (a) Money is valid (b) Money is invalid
(a) 1 only (b) 2 only (c) Both correct (d) Neither 1 nor 2 (c) Money in circulation (d) a and c.

89. Which of the following payment systems are operated by 98. Which of the following statements regarding Goods
National Payments Corporation of and Services Tax (GST) Council is/are correct?
India (NPCI)? 1.It is a statutory body.
1. Immediate Payment Service (IMPS),
2.It is headed by the Prime Minister.
2. National Automated Clearing House (NACH)
3. National Financial Switch (NFS 3.Each state can nominate a minister in charge of
4. Unified Payments Interface (UPI) finance or taxation or any other minister as a member of
Select the correct answer using the code given below. the GST Council.
(a) 1 and 3 (b) 1, 3 and 4 (c) 2 and 4 (d) 1, 2, 3 and 4 4.GST council recommends to the Union and the states
on important issues related to GST, like the goods and
90. Which of the following factors responsible for a surplus in services that may be subjected or exempted from GST,
the current account of an economy? various rate slabs of GST, etc.
1. It has huge domestic market and less production. Select the correct option using the code given below:
2. It imports low-technology items and exports high- (a)1 & 2 (b)3 & 4 (c)1 & 3 (d)2 & 4
technology items.
3. Its exports are compulsory imports for other economies.
4. Its imports are non-compulsive in nature 99. Consider the following statements:
Select the answer using the code given below: 1. Until the outbreak of the First World War, all
(a) 1, 2 and 3 (b) 2, 3 and 4 (c) 1, 3 and 4 (d) 1, 2 and 4 currencies were pegged to the value of gold.
2. Post-independence the Indian rupee was Used by
91. Corporation tax in India is levied on income of a company. Indians in large numbers.
Which one of the following does not include Corporation tax? Which of the statements given above is/are correct?
(a) Profit from business (b) Capital gain (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2
(c)Interest on securities (d) Sale proceed of assets
100. Which of the following statements about the
92. Consider the following statements:
calculation of Gross Domestic Product
1. Gross Value Added at basic prices excludes production
taxes and include production subsidies available on the (GDP), is not correct?
commodity. (a) The GDP measures the aggregate production of final
2. Gross Domestic Product at market prices includes both goods and services taking place within the domestic
production and product taxes and excludes both production territory.
and product subsidies. (b) It does not consider the aggregate production of final
Which of the statements given above is/are correct? goods and services produced by foreign national within the
(a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 domestic territory.
(c) In GDP calculation, negative externalities are not
93. Mining coming under which sector considered.
(a) Secondary sector (b) Primary sector
(d) In GDP calculation, the aggregate production of final
(c) Tertiary sector (d) None of the above
goods produced by Indian citizen in the foreign territory is
94. Statements regarding organized sector workers which are not included.

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correct:
1. Employees of organized sector work for fixed number of
hours in a day.
2. If any employee works beyond the fixed number of hours,
then he/she will be paid for the overtime.
3. Job security is not there.
(a) 1 and 3 (b) 3 (c) 2 and 3 (d) 1 and 2

95. RBI was established in which year

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