General Awareness : Indian Economy Quiz

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| By Tanmay Shankar
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Tanmay Shankar
Community Contributor
Quizzes Created: 491 | Total Attempts: 1,781,791
Questions: 15 | Attempts: 2,086

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General Awareness : Indian Economy Quiz - Quiz

This quiz is about Indian economy created on Aug-19-2011


Questions and Answers
  • 1. 

    The central banking functions in India are performed by the
    1. Central Bank of India
    2. Reserve Bank of India
    3. State Bank of India
    4. Punjab National Bank

    • A.

      I, II

    • B.

      II

    • C.

      I

    • D.

      II, III

    Correct Answer
    B. II
    Explanation
    The correct answer is II. The Reserve Bank of India performs the central banking functions in India.

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  • 2. 

    Development expenditure of the Central government does not include

    • A.

      Defence expenditure

    • B.

      Expenditure on economic services

    • C.

      Expenditure on social and community services

    • D.

      Grant to states

    Correct Answer
    A. Defence expenditure
    Explanation
    The development expenditure of the Central government does not include defence expenditure because defence expenditure is categorized as a separate expenditure and is not considered as a part of the development expenditure. Development expenditure refers to the funds allocated for activities that promote economic growth, infrastructure development, social welfare programs, and community services. Defence expenditure, on the other hand, is specifically allocated for national security and defense purposes, which are separate from development activities.

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  • 3. 

    ICICI is the name of a

    • A.

      Chemical industry

    • B.

      Bureau

    • C.

      Corporation

    • D.

      Financial institution

    Correct Answer
    D. Financial institution
    Explanation
    ICICI is the name of a financial institution. This is because ICICI is a well-known bank in India, providing a wide range of financial services such as banking, insurance, investment, and wealth management. It is one of the largest and most reputable financial institutions in the country, serving millions of customers and playing a significant role in the Indian economy.

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  • 4. 

    Gilt-edged market means

    • A.

      Bullion market

    • B.

      Market of government securities

    • C.

      Market of guns

    • D.

      Market of pure metals

    Correct Answer
    B. Market of government securities
    Explanation
    Gilt-edged market refers to the market of government securities. These securities are considered to be of the highest quality and are backed by the government, making them low-risk investments. The term "gilt-edged" comes from the historical practice of government bonds being printed with a gilt (gold) edge to signify their high creditworthiness. Investors often turn to the gilt-edged market for secure and stable investments, as the government is unlikely to default on its obligations.

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  • 5. 

    In the last one decade, which one among the following sectors has attracted the highest foreign direct investment inflows into India?

    • A.

      Chemicals other than fertilizers

    • B.

      Services sector

    • C.

      Food processing

    • D.

      Telecommunication

    Correct Answer
    D. Telecommunication
    Explanation
    Telecommunication has attracted the highest foreign direct investment inflows into India in the last decade. This sector has seen significant growth and investment due to the increasing demand for mobile and internet services in the country. The expansion of telecommunication networks, the rise of smartphone usage, and the implementation of government initiatives such as Digital India have all contributed to the sector's attractiveness for foreign investors. Additionally, the liberalization of the Indian telecom market and the entry of foreign telecom companies have further fueled the inflow of foreign direct investment into this sector.

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  • 6. 

    Devaluation of a currency means

    • A.

      Reduction in the value of a currency vis-a-vis major internationally traded currencies

    • B.

      Permitting the currency to seek its worth in the international market

    • C.

      Fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies

    • D.

      Fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners

    Correct Answer
    A. Reduction in the value of a currency vis-a-vis major internationally traded currencies
    Explanation
    Devaluation of a currency refers to a reduction in its value compared to major internationally traded currencies. This means that the currency becomes weaker and can buy fewer goods and services in the international market. It is a deliberate policy measure taken by a country's central bank or government to make its exports more competitive and stimulate economic growth. Devaluation can help boost a country's exports by making them cheaper for foreign buyers, but it can also lead to higher inflation and increased costs for imports.

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  • 7. 

    In the second nationalization of commercial banks, ___ banks were nationalized.

    • A.

      4

    • B.

      5

    • C.

      6

    • D.

      8

    Correct Answer
    C. 6
    Explanation
    In the second nationalization of commercial banks, 6 banks were nationalized.

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  • 8. 

    Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves
    1. interest payments
    2. subsidies
    3. defence
    4. irrigation

    • A.

      I, II

    • B.

      I

    • C.

      I, II, III

    • D.

      II, III, IV

    Correct Answer
    A. I, II
    Explanation
    The correct answer is I, II. Since independence, both development and non-development expenditures have increased, with the increase in non-development expenditure being slightly more than in development expenditure. Non-development expenditure includes interest payments and subsidies. Therefore, options I and II are the correct choices.

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  • 9. 

    Depreciation means

    • A.

      Closure of a plant due to lock out

    • B.

      Closure of a plant due to labour trouble

    • C.

      Loss of equipment over time due to wear and tear

    • D.

      Destruction of a plant in a fire accident

    Correct Answer
    C. Loss of equipment over time due to wear and tear
    Explanation
    Depreciation refers to the decrease in the value of an asset over time due to wear and tear or obsolescence. It is a gradual reduction in the value of equipment or property as it ages or gets used. This reduction in value is accounted for in financial statements to reflect the decrease in the asset's worth. Depreciation is not related to the closure of a plant due to lockout, labor trouble, or any accidents like fire. It specifically pertains to the decrease in the value of equipment over time.

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  • 10. 

    Deficit financing leads to inflation in general, but it can be checked if

    • A.

      Government expenditure leads to increase in the aggregate supply in ratio of aggregate demand

    • B.

      Only aggregate demand is increased

    • C.

      All the expenditure is denoted national debt payment only

    • D.

      All of the above

    Correct Answer
    D. All of the above
    Explanation
    Deficit financing refers to the practice of a government spending more money than it receives through revenue, resulting in a budget deficit. This can lead to inflation because the increased government expenditure increases the aggregate demand in the economy. However, inflation can be checked if the government expenditure also leads to an increase in the aggregate supply in proportion to the aggregate demand. Additionally, if the government expenditure is solely used for national debt payment, it can also help control inflation. Therefore, all of the above options can help mitigate the inflationary effects of deficit financing.

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  • 11. 

    If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits

    • A.

      Will decrease

    • B.

      Will increase

    • C.

      Will neither increase nor decrease

    • D.

      None of the above

    Correct Answer
    C. Will neither increase nor decrease
    Explanation
    If all the banks in an economy are nationalized and converted into a monopoly bank, the total deposits will neither increase nor decrease. This is because nationalizing and converting the banks into a monopoly bank does not directly affect the total amount of deposits in the economy. The only change is the consolidation of all banks into a single entity, but the total deposits remain the same.

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  • 12. 

    India changed over to the decimal system of coinage in

    • A.

      April 1995

    • B.

      April 1957

    • C.

      April 1958

    • D.

      April 1959

    Correct Answer
    B. April 1957
    Explanation
    India changed over to the decimal system of coinage in April 1957. This means that before April 1957, India used a different system of coinage. The decimal system of coinage is based on multiples of 10, where each coin has a value that is a power of 10. This system is widely used around the world and makes calculations and transactions easier. By switching to the decimal system of coinage, India brought its currency in line with international standards and made it more convenient for its citizens and businesses to use.

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  • 13. 

    The association of the rupee with pound sterling as the intervention currency was broken in

    • A.

      1990

    • B.

      1991

    • C.

      1992

    • D.

      1993

    Correct Answer
    C. 1992
    Explanation
    In 1992, the association of the rupee with pound sterling as the intervention currency was broken. This means that the Indian rupee was no longer pegged to the pound sterling for currency intervention purposes. Instead, the Indian government adopted a flexible exchange rate system, allowing the value of the rupee to be determined by market forces. This decision was likely influenced by various factors such as changes in the global economy and India's own economic goals and priorities.

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  • 14. 

    On which one of the followings is the benefits received principle of taxation to achieve optimality bases?

    • A.

      Marginal benefit received

    • B.

      Total benefit received

    • C.

      Average benefit received

    • D.

      Ability to pay for the benefit

    Correct Answer
    D. Ability to pay for the benefit
    Explanation
    The benefits received principle of taxation is based on the idea that individuals should pay taxes in proportion to the benefits they receive from government services. The ability to pay for the benefit is the most appropriate basis for achieving optimality in this principle. It takes into account an individual's ability to pay taxes, ensuring that those who can afford to pay more contribute a larger share. This principle promotes fairness and equity in taxation by considering the financial capacity of individuals to bear the tax burden.

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  • 15. 

    One of the reasons for India's occupational structure remaining more or less the same over the years has been that

    • A.

      Investment pattern has been directed towards capital intensive industries

    • B.

      Productivity in agriculture has been high enough to induce people to stay with agriculture

    • C.

      Ceiling on land holdings have enabled more people to own land and hence their preference to stay with agriculture

    • D.

      People are largely unaware of the significance of transition from agriculture to industry for economic development

    Correct Answer
    A. Investment pattern has been directed towards capital intensive industries
    Explanation
    The correct answer suggests that one of the reasons for India's occupational structure remaining the same over the years is that the investment pattern has been directed towards capital intensive industries. This means that the focus of investment has been on industries that require a large amount of capital, such as manufacturing or infrastructure, rather than on sectors like agriculture or services. This has led to a limited shift in the occupational structure, as more people continue to work in agriculture rather than transitioning to industry.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 20, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 19, 2011
    Quiz Created by
    Tanmay Shankar
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