op eco 2 Flashcards

Question

25.The self-employed in a developing country who are engaged in small scale labour intensive work belong to the- (A) Informal sector (B) Primary sector (C) Secondary sector (D) Tertiary sector

Answer 1

(B) (SSC Combined Matric Level 2002) Exp: This above scenerio can be observed in primary sector of developing country. Since, developing stage work done in primary sector is more labour intensive like agriculture employees, farmer engaging in small scale is labour intensive work.

Answer 2

(A) (SSC Const. (GD) & Rifleman (GD) 2012) Exp: Price mechanism refers to system of fixing price of the products according to their demand and supply. Capitalistic economy is that type of economy in which production and distribution of goods and services is done by private organisations and price of the goods and services are decided by their demand and supply.

Answer 3

(D) (SSC Const. (GD) & Rifleman (GD) 2012) Exp: Capitalist economy is economic system in which production and distribution of goods and services is done by private organisation. Thus, private ownership is allowed.

Answer 4

(B) (SSC MTS 2013) Exp: Intermediary goods are input goods for further production. These goods are sold in industries for resale or production of other goods.

Answer 5

(A) (SSC (10+2) Level Data Entery 2013) Exp: Primary sector is that sector of economy which involves production from natural resources like agriculture, mining, fishery etc. Generally it involves production through natural process like mining, mineral extracted are made by natural process.

Answer 6

"(A) (SSC CGL Tier- 2014) Exp: Marginal efficiency of capital is expected profits from new investemnt. According to Keynes, General theory of employment, interest and money, ""Business cycles are caused by variation in rate of investement which are caused by fluctuations in marginal efficiency of capital."

Answer 7

(A) (SSC CGL Tier-I 2014) Exp: Keynesian economics is all about spendings and its effect on economy as output and inflation. It emphasise on government expenditure leading to increase in GDP.

Answer 8

(B) (SSC CGL Tier-I 2014) Exp: Keynes book ''General theory of Employment, Interest and money'' lays the centrepiece to the study of macroeconomics. This book particularly propounded the modern economics.

Answer 9

(D) (SSC CGL Tier-I 2014) Exp: Macro economics deals with economics at whole level particularly it involves issues like national income, growth, inflation, population and unemployment etc.

Answer 10

(C) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Capacity utilization refers to the level to which the capacity is used in terms of generation of goods and services. It is a measurment that state percentage of capacity used in production.

Answer 11

(A) (SSC CGL Tier-I 2015) Exp: Internal economies refers to those economies (reduction in cost) which occurs due to firm itself. Internal economies occur when firm expands or enlarge its scale of production.

Answer 12

(A) (SSC CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: Barter is system of exchange where goods are exchange for other goods in return

Answer 13

(B) (SSC CGL Tier-I 2014) Exp: Social infrastructure refers to facilities that help in social welfare. Like education, health care, research, sports and recreational infrastructure, ports, tourism etc.

Answer 14

(C) (SSC Sec. Officer 2003) Exp: Social overheads capital is type of capital goods that are available to everybody by the value of members of society. These are usually provided by government.

Answer 15

(D) (SSC Sec. officer 2006) Exp: Classification of Industries on the basis of raw material can be done in Agro-based and Mineral based. Agrobased industries have agricultural produce as raw material. On other hand industries which use minerals as raw material are called as mineral based industries.

Answer 16

(B) (SSC SAS 2010) Exp: Existence of black money reduces impact of monetary policy decision and also black money distort the allocation of resources and accuracy of economic forecast. Black money also spread social injustice and growth because of unaccounted money.

Answer 17

(D) (SSC CGL Tier-I 2014) Exp: Dual pricing is mechanism of setting prices at two level one is usually minimum selling price and other price is according to demand & supply of the produce i.e. Market price. Example: Price of wheat one is fixed by government i.e. MSP and other is open market price.

Answer 18

(D) (SSC Combined Matric Level 2000) Exp :Black market refers to situation where goods available are scarce or not easily available so to make them available someone act as intermediary and sold them at higher prices. Ex: Urea, price of urea is fixed at particular level but when demand is high, urea is sold at high price. This situation is Black market.

Answer 19

(A) (SSC CPO SI 2005) Exp: A Closed economy is that economy which do not deal with other countries or in other words economy which do not transact (import and export) with foreign countries.

Answer 20

(C) (SSC Tax Assistant (Income & Central Excise 2007) Exp: Free trade refers to free movement of goods from one country to another without restriction in from of tarrifs. Free trade principle work on mutual gain theory which state the free trade mutually benefit the countries.

Answer 21

(A) (SSC Tax Asst. (Income & Central Excise 2007) Exp: The term 'Laissez faire' is a French term that is use to show economy without any government intervention. In these economies, entry and exit is free and also pricing is done according to demand and supply of product. All these above scenerio develop in capitalist economy.

Answer 22

(A) (SSC Graduate Level Tier-I 2013) Exp: Externality theory forms the basis for the theory of environmental economics. Externality is realisation of benefit or loss resulting from activity which affects on otherwise involved party. Example- Environmental pollution is good example of externality.

Answer 23

(A) (SSC Combined Matric Level 2000) Exp: Tertiary sector is one of the sectors of economy that mainly deals with service industry. Service is the process of facilitation to the consumer. Examples- Transport, communication, distribution of goods, entertainment etc.

Answer 24

(D) (SSC CAPFs SI CISF ASI & Delhi 2015) Exp: Economies of firm refers to reduction in cost of production due to better combination of use of raw material So the average cost reduces and ultimately reducing cost of production.

Answer 25

(D) (SSC CHSL 2017) Exp: Business cycle is various stages of business on the basis of growth like: Expansion, Maturity, Contraction and finally decline.

Answer 26

(D) (SSC CHSL 2017) Exp: Pareto-superior is the situation in economics in which someone is made better off without making someone else worse off.

Answer 27

(D) (SSC CHSL 2017) Exp: Giffen goods are those goods whose demand increases with increase in their price.

Answer 28

(D) (SSC CHSL 2017) Exp: Inferior goods are those goods whose demand decreases with increase in income of the consumer. Example: Kerosene etc.

Answer 29

Ams. (A) (SSC CHSL 2017) Exp: Substitute goods are those goods which are usually homogeneous and can be consumed in place of one another. Decrease in price of a good leads to decrease in the demand for another good.

Answer 30

(A) (SSC CHSL 2017) Exp: Macro-economics is branch of economics that deals with economics as a whole or at the wholesome level. Circular flow of Income is at whole or bigger level. So it is part of macro Economics.

Answer 31

(D) (SSC CHSL 2017) Exp: Substitute goods are those goods which can be consumed at one another place. So, If price of one good increases, it will automatically shift consumer towards another goods.

Answer 32

(B) (SSC CHSL 2017) Exp: Veblen goods also can be said as positional good, or kind of luxury goods. Their demand increases as the income of consumer increases. One of the feature of Veblen goods is that their demand is created as the more income is earned like luxury care, (jewellery).

Answer 33

(B) (SSC CHSL 2017) Exp: According to economic survey highest number of people are working in agriculture.

Answer 34

(D) (SSC CHSL 2017) Exp: Substitute goods are those goods which are usually homogeneous and can be consumed in place of one another. An increase in price of a good will cause increase in demand for another good.

Answer 35

(B) [SSC DEO Exam, 2009] Exp: Relationship between value of money (value of money is exchange rate or the power of one unit to buy) and price level (general price level of commodities) in an economy is inverse. In simple words, when value of money decreases people have more money supply. Hence increase in price level and vice versa.

Answer 36

(D) [SSC CPO 2015] Exp: Cost push inflation is inflation i.e. general rise in level of price due to increase in cost (means increase in price of inputs). Cost push inflation leads to decrease in savings. It also impacts import by decreasing it. So all of the above effects are result of cost push inflation.

Answer 37

(A) [SSC CGL 2010] Exp: Inflation is a rise in price level of commodities. So, it depicts increase of money supply. To prevent inflation, tax rate should be increased. So that increased tax rate suck extra money available in economy.

Answer 38

(B) [SSC CPO Exam 2003,CPO 2013] Exp: The group which suffers the most from inflation is creditors because creditor had lend the money when value of money was high So when they will recieve money back it will be of equal amount but of less value.

Answer 39

(D) [SSC MTS Exam, 2002] Exp: Rising inflation can be check by decreasing supply of money using monetary tools like SLR, CRR, Bank rate etc.

Answer 40

(C) [SSC MTS 2002] Exp: Government securities are said to be liquid because these securities are easily marketable. Government securities can be sold easily due to assured rate of return as well as backing by government. So these are considered liquid because they are quickly and easily marketable.

Answer 41

(D) [SSC CGL 2004, CPO 2017 & DEO 2013] Exp: Inflation refers to general increase in price level of commodity. In other words, Inflation is situation where due to increase in money supply, price level of commodities also increases.

Answer 42

(B) [SSC MTS 2013] Exp: National accounts statistics are calculated with the base year 2004-05. That is now changed to 2011-12.

Answer 43

(A) [SSC CHSL (10+2)DEO & LDC 2004] Exp: Inflation is general increase in price level of commodity. It can be checked by reducing money supply by the government, by reduction in deficit financing or tax increase, reduction in expenditure. Increase in consumption by no way help in reducing money supply.

Answer 44

(B) [SSC CAPFs SI, CISF ASI & DP SI 2015] Exp: Inflationary price rise may hamper the growth by devaluating money. Hence less productivity. It also effect equalities, and promote inequalities by keeping poor more poor and unsustainability of consumption. Here all of these happens in inflationary price rise.

Answer 45

(B) [SSC (10+2) Steno. Grade 'C' & 'D' 2016)] Exp: Measures to control inflation can be of two types:- Demand-side measure- by reducing demand. Supply-side measure can be PDS i.e. public distribution system that will ensure availibility of essential commodity hence price control. Some other measures like sale of grains by FCI during price rise, it will increase supply of grain in market. Hence reduction in price.

Answer 46

(C) [SSC (10+2) Steno. Grade 'C' & 'D' 2016) Exp: Galloping inflation refers to situation of rise in price level more than two or three digits. This situation is very harmful for economy and very hard to recover from this condition. It collapses whole economy. It is also known as Hyper inflation.

Answer 47

(B) [SSC MTS 2016)] Exp: Great depression was depression in economic activities spread all around the world. It originated in United States with severe fall in price of stocks (also known as black Tuesday) later it spread all over the world. It occured in 1929.

Answer 48

(B) [SSC MTS 2013] Exp: Great depression was depression in economic activities all around the word. It originated in united states with severe fall in price of stock (also known as black tuesday) later it spread all over the world. It occured in 1929.

Answer 49

(B) [SSC Section Officer 2013 Exp: CPI i.e. Consumer Price Index measures the change in price of consumer goods at retail level. CPI has been adopted as monetary tool objective to see inflation. Consumer price index shows change in price level in comparison to base year. It is published by CSO quarterly.

Answer 50

(D) [SSC CGL Tier-I 2013] Exp: Forced saving in economics is situation where consumer is forced to save money due to non-availability of goods that he want or due to greater rise in price of goods.

Answer 51

(B) (SSC CPO 2007) Exp: Inflation is general rise in price level of commodity. In other words, it means due to increase in money supply, rise in price level. That means too much money chasing few goods.

Answer 52

(B) [SSC SS CPO SI 2013) Exp: Inflation devalues currency so it helps borrower to pay less than value of money he has borrowed. Devaluation of money affect creditors badly because the money recevied back will be of less value.

Answer 53

(B) [SSC Section Officer 2005) Exp: Inflation means rise in price level of commodity from general level that also means increase in money supply. To check inflation the measures that should be taken can involve decrease in money supply by several measures like one of the measures is open market operations by RBI.

Answer 54

(B)Exp: Inflation: when there is less supply and more demand of product it will lead to increase in the price of the product. So when aggregate supply is less than aggregate demand, there will be rise in price.

Answer 55

(C) [SSC Section Officer 2008] Exp: Disinflation is slow increase in rise of price level. Generally disinflation is much needed because it helps competition to grow and make production profitable. When money supply is reduced, it slows down the rate of inflation.

Answer 56

(D) [SSC Tax Assistant (Income Tax & Central 2009] Exp: Stagflation is kind of inflation with a combination of no economic growth and higher unemployment. So stagflation will be referring to situation where rate of growth is slower than the rate of price increase.

Answer 57

(A) [SSC CPO Sub-Inspector 2010] Exp: Cheap money means easy availibility of money that means increase in supply of money that can be done through low rate of interest.

Answer 58

(B) Exp: Inflation refers to general increase in price level of commodity. In other words inflation is situation where due to increase in money supply, price level of commodities also increases.

Answer 59

(C) [SSC Data Entry Operator 2009] Exp: Same as explanation of Q. No. 23.

Answer 60

(C) [SSC Constable (GD) 2013] Exp: Deflation is opposite to inflation. In inflation due to excess availbility of money, value of money decreases. In case of deflation, there is decrease in price of commodity this is due to reduced supply of money so value of money increases.

Answer 61

(D) [SSC CGL Tier-I 2013] Exp: Same as explanation of Q. No. 23.

Answer 62

(C) [SSC CGL Tier-I Re-2013-14] Exp: Inflation affects the nature of wealth distribution. Entrepreneurs gain more than fixed cost in production during inflation due to increase in price.

Answer 63

(B) [SSC CHSL 2017] Exp: Deflation is decrease in price of goods and services. So to deal with it, injection of money in economy is resorted through several government spending measures or tax reductions. This phenomenon is called as pump priming.

Answer 64

(A) [SSC CHSL 2017] Exp: Inflation means general increase in price of goods that automatically means, that there is more money available in relation to few goods.

Answer 65

(B) [SSC CHSL 2017] Exp: CPI: Consumer Price Index: Change in price of goods at retail level. CPI - IW- is prepare by labour bureau CPI - NEW - by Central Statistical Office with base year 2012.

Answer 66

(D) [SSC CHSL 2017] Exp: Dearness Allowances is certain percentage of salary to mitigate the impact of inflation calculated as a percentage of salary.

Answer 67

(B) [SSC CHSL 2017] Exp: Real rate of interst = nominal rate of interestinflation Answer will be 4.50%

Answer 68

(B) [SSC CHSL 2017] Exp: Stagflation is the combination of high inflation and rising unemployment due to recession leading to low growth.

Answer 69

(B) [SSC CHSL 2017] Exp: Increase in money supply leads to more money available for the same goods which were available for the less price. So, increase in growth rate of nominal money supply results in high rate of inflation.

Answer 70

(C) [SSC CHSL 2017] Exp: Nominal rate of interest = Real interest rate + inflation rate So by following this formula answer will be 9%

Answer 71

(A) [SSC CHSL 2017] Exp: Inflation is condition where there is increase in general price level of articles. So, if money supply growth is faster it will create more money chasing too few goods. Ultimately leading inflation.

Answer 72

(C) [SSC CHSL 2017] Exp: Recession is a situation in economy where there is decline in growth resulting inactivity so resulting capacity under utilization.

Answer 73

(D) [SSC CHSL 2017] Exp: Real rate of interest = nominal rate of Interest inflation rate. So answer will be 5.5 percent.

Answer 74

(B) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise resulting increase in price indices but decrease in output.

Answer 75

(A) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise.

Answer 76

(A) [SSC CHSL 2017] Exp: Inflation is situation where there is general increase in price of goods leading to many hands with money chasing few goods.

Answer 77

(B) [SSC CHSL 2017] Exp: Stagflation is situation in a country when there is inflation but not employment. Here production will decrease with the price rise.

Answer 78

(B) [SSC CHSL 2017] Exp: Rate of growth in money supply is directly proportionate to inflation in long run

Answer 79

(D) [SSC CPO 2017] Exp: Hyper-inflation is that type of inflation in which rate of inflation is more than 3 digits. This phenomenon has been observed in Germany after World War II.

Answer 80

(A) [SSC CPO 2017] Exp: Reflation is a government policy to reduce burden of deflation, it includes reducing taxes, increasing money supply, lowering interest rates etc.

Answer 81

(C) [S.S.C (CGL) 2013] Exp: The expenditure on advertisement and public relation by an enterprise is a part of its intermediate consumption. Intermediate consumption is the expenditure done on those good and services which are used as inputs for production of final goods and services.

Answer 82

(C) [S.S.C MTS 2006] Exp: If a country produces only consumer goods and there is no exchange of goods and services with other countries its economy will distort. International trade is done in order to fulfill the requirements of things that are not available in their country and to sell things in foreign markets which are in excess in their country.

Answer 83

(B) [S.S.C 10+2 2013] Exp: The income of Indians working abroad is known as income earned from abroad by Indian nationals.

Answer 84

(B) [S.S.C CGL 2015] Exp: When income increases, expenditure also increases but not in the proportion of income. So the ratio between income and expenditure changes by less than 1.

Answer 85

(A) [SSC CGL 2006] Exp: The method used in census of Indian agriculture is production method, in which data of lands are collected which is wholly or partially used under agricultural production.

Answer 86

(B) [SSC MTS. 2008] Exp: In 1949, First Income Committee was established under the chairmanship of P.C Mahalonobis. D.R. Gadgil and Dr V.K.R.V Rao were its two members. It was constituted to calculate national income on scientific basis.

Answer 87

(A) [SSC DEO 2009] Exp: A depreciation refers to reduction in a value of fixed asset over a certain period of time. It can be calculated by substracting net income from gross income.

Answer 88

(A) [SSC 10+2 2012] Exp: Net National Product is defined as value of total goods and services produced by the citizens of a country residing anywhere in the world minus depreciation of capital goods. It can also be named as National Income. GNP - depreciation = NNP

Answer 89

(C) [SSC 10+2 2010] Exp: Per capita income refers to average income per person of any country over a certain period of time. If per capita income of poor increases it will indicate better welfare of a country.

Answer 90

(B) [SSC (10+2) 2011] Exp: Income and consumption are directly related so that when income rises, consumption is also increased.

Answer 91

(C) [SSC CPO Exam, 2010] Exp: There are 3 methods through which national income can be calculated. These includes value Added Method, Income Method and Expenditure Method. Investment method is not related to calculation of national income.

Answer 92

(D) [SSC MTS Exam, 2002] Exp: Gross profit can be calculated by substracing total expenditure from total revenue. Total revenue is referred to as total receipts while total expenditure is cost of production of goods or services.

Answer 93

(A) [SSC FCI 2012] Exp: Per capita Income is the income per person or in other words it can be represented by average income of the people of a country. So, per capita income will be National income divided by population.

Answer 94

(B) [SSC (10+2) 2012] Exp: Lack of opportunity is the most appropriate reason for inequalities in India. Lack of opportunity means the assets available with people are not used due to non-availibility of chance to performance to various reasons.

Answer 95

(D) [SSC (10+2) Exam, 2010] Exp: National Income is defined as value of total goods and services produced by a citizen of any country residing anywhere in world. Construction of a new house will be included in national income because it forms the part of capital formation.

Answer 96

(C) [SSC CGL Exam, 2008] Exp: Winning a lottery is not included in national income because national income includes the total value of final goods and services produced over a certain period of time.

Answer 97

(A) [SSC SO Exam 2005, SSC CPO Exam 2003] Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.

Answer 98

(D) [SSC Tax Asst. Exam, 2004] Exp: Depreciation refers to reduction in a value of fixed asset over a certain period of time. It can be calculated by subtracting net national product from gross national product.

Answer 99

(B) [SSC SO 2003] Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.

Answer 100

(B)Exp: National income is defined as total value of goods and services produced by citizens of any country residing anywhere in the world over a period of 1 year. It is also referred as total productive income of any country.

Answer 101

(C) [SSC (10+2) Exam, 2002] Exp: Services provided by housewives can be categorised as non-economic services and thus, cannot be accounted in National Income.National Income is the sum of all the final goods and services produced in a country in a particular period of time.

Answer 102

(B) [SSC (10+2) 2002] Exp: Gross national product is defined as total value of goods and services produced by citizens of any country residing in any part of the world over certain period of time.

Answer 103

(B) [SSC (10+2) 2002] Exp: Gross national product is defined as total value of goods and services produced by citizens of any country residing in any part of the world over certain period of time.

Answer 104

(C) [SSC (10+2) Exam, 2002] Exp: Net National Product at market prices can be defined as the total market value of final goods and services produced minus depreciation of capital assests over a period of 1 year. It is equal to the aggregate net value of the output in 1 year.

Answer 105

(C) [SSC (10+2) Exam, 2001] Exp: National Income accounting system is used to calculate the income and production within an economy over a certain period of time.

Answer 106

(C) [SSC (10+2) 2011] Exp: According to United Nations conventions on the law of sea a country has right to exploit resources and regulate fisheries upto exclusive economic zone extending to 200 km from its shore. So income generated by fishermen will consitute the part of GDP of India.

Answer 107

(B) [SSC MTS. Exam, 2001] Exp: In developed countries, only a small percentage of population is engaged in agriculture. So the contribution of agriculture to GDP is relatively low compared to the developing countries.

Answer 108

(D) (SSC CPO SI 2003) Exp: To achieve high rate in growth of national output, one of the measure can be increase the rate of investment. Increasing investment leads to creation of capital employment, distribution of money etc. Capital output ratio is amount of capital needed to produce one unit of output. There is clear relationship between investment, capital output ratio and economic growth. Economic Growth = Saving% of GDP Capital-output ratio

Answer 109

(B) (SSC Sec. Offier 2003) Exp: National income in simple words means calculation of Income of a country. Simpally National income is value of all final goods and services produced within country for a specific time period. Generally National Income includes calculation of GDP, per capita income etc.

Answer 110

(D)Exp: Gross National Product is market value of all goods and services produced within country for a specific time. Here selling of share Rs.10000 is just transfer of money here no production is happing. Hence, No impact on gross national product.

Answer 111

(B) (SSC Sec. 2005) Exp: Central Stastical organisation:- It is a governement agency and works under ministry of statistics and programme implementation. CSO was setup with objective of providing technical leadership in building up the statistical system in country, in 1951. Functions of CSO:- 1. Advisory to statistical agencies 2. Preparing and publishing national accounts statistics 3. Conducting economic census

Answer 112

(A) (SSC Sec. Officer 2007) Exp: Indian Railways is a governement organisation which works under Ministry of railways it was setup during Britisher's under private entity. Later on during independence it was changed to nationalised enterprise Works of Indian Railways 1. A medium of mass transport and communication 2. A medium of mass transportation of goods and services 3. Connecting last mile pepole in the country. One of the mostsuccessful public enterprise of Govt. India

Answer 113

(A) (SSC Sec. Officer 2008) Exp: Per capita income measure average income earned per person in given area. It is measured by dividing the country's total income by its population

Answer 114

(A) (SSC Tax Asst. (Income Tax & Central Ex. 2008) Exp: GDP at factor cost is GDP minus indirect tax plus Subsidies. Gross Domestic Product at Factor cost Net = Gross - Depreciation National = Domestic + factor income from abroad Factor cost = Market price + subsidies - taxes.

Answer 115

(D) (SSC Tax Assistant (Income Tax & Central Excise 2009) Exp: Gross domestic product is defined as the value of all final goods and services produced in an economy in year.

Answer 116

(A) (SSC Combined Matric Level 2000) Exp: Generally developing nations have primary sector as largest share in national Income. But India is and exception, In India largest share in national income is from tertiary sector which we can call service sector. Service sector includes transport, IT etc.

Answer 117

(D) (SSC CML 2001, CGL 2007, SSC Steno, 2010) Exp: Centra l Stast ica l organisat ion :- It is a governement agency and works under ministry of statistics and programme implementation. CSO was setup with objective of providing technical leadership in building up the statistical system in country, in 1951. Functions of CSO 1. Advisory to statistical agencies 2. Preparing and publishing national accounts statistics 3. Conducting economic census

Answer 118

(D) (SSC Combined Matirc Level 2000) Exp: National income refers to value of all final goods produced within the country for a specific time period. Calculation of GDP by Income method includes factor cost i.e. wages and salaries, profit. It does not involves interest on national debt.

Answer 119

(A) (SSC Combined Matric Level 2002) Exp: Net National at Factor cost Net = Gross - depreciation National = domestic + factor income from abroad Factor cost = Market price + subsidies - Taxes.

Answer 120

(D) (SSC Combined Matri Level 2006) Exp: V.K.R.V. Rao was an Indian economist who pioneered in National Income by his famous works — 'Changes in India's National Income, a static economy in progress (1954) and the National income of British India (1941)

Answer 121

(B) (SSC Combined Matric Level 2008, SSC CGL 2008, SSC CPO 2017) Exp: Dadabhai Naoroji estimated National Income in India for the first time in 1876. Mainly calculation was done by estimating the value of agricultrural and nonagricultural production.

Answer 122

(A) (SSC (10+2) Level Data Entry Operator & LDC 2011) Exp: While computing national income estimates value of export will be added because by export their is earning of some value and value of import will be deducted because import leads to deduction of income (because of payment). Export and Import are part of national income when we calculate National income by expenditure method.

Answer 123

(A) (SSC (10+2) Level Data Entry 2011) Exp: National Income in economics term can be defined as Net National Product + subsidy - indirect taxes.

Answer 124

(D) (SSC (10+2) Level Data Entry 2011) Exp: Estimation of National income through income method is done by calculating income to individual. Income is considered to occur by factor of production in form of factor cost like wages, salaries, rent, interest on capital, profit etc. Undistributed profit is income but when it will be distributed only then it will be realised. So no inclusion in national income.

Answer 125

(A) (SSC Graduate Level Tier-I 2009 & 2012) Exp: Generally developing nations have primary sector as largest share in national Income. But, India is exception, In India largest share in national income is from tertiary sector or we can call service sector. Service sector includes transport, IT etc.

Answer 126

(B) (SSC FCI Assistant Grade-II 2012) Exp: Domestic production is value of goods produced within physical boundaries of country whereas national production is value of goods produced within nation i.e. it includes Domestic production and Net Foreign Income from abroad.

Answer 127

(B) (SSC MTS 2014) Exp: Gross domestic product is value of final goods produced within the domestic boundaries including depreciation. So GDP is a country's domestic economic activities.

Answer 128

(D) (SSC CGL Tier-I 2014, SSC CPO 2009) Exp: Methods of calculating National income:- 1. Income Method - by calculating income of country in form of Rent, Wages, Profit and Interest. 2. Expenditure Method- by calculating expenditure done in form of Government expenditure, Investment and Foreign expenditure and consumption private. 3. Product Method or Gross Value Addition method - also can be said as output Method. It is calculated by calculating value addition at each stage of production.

Answer 129

(A)Exp: The profit of Indian banks operationg in foreign countries are part of income from entrepreneurship earned from abroad.

Answer 130

(C) (SSC CAPFs SI, CISF ASI & Delhi Police 2015) Exp: Methods of calculating National income: 1. Income Method - by calculating income of country in form of Rent, Wages, Profit and Interest. 2. Expenditure Method- by calculating expenditure done in form of Government expenditure, Investment and Foreign expenditure and private consumption. 3. Product Method or Gross Value Addition method - also can be said as output Method. It is calculated by calculating value addition at each stage of production. So sum of all savings cannot be included in calculating of national income.

Answer 131

(D) (SSC Section officer 2003) Exp: The method of calculating national income by product method is also known as Value Added Method. In product method calculation of National Income is done by adding total value added at each stage of production. So it is also known by Value Added method.

Answer 132

(A) (SSC Section officer 2003) Exp: GDP is value of final goods produced within domestic boundries of nation. It do not show income distribution. Per capita income is best measure to show income distribution. Also per capita income shows the average income earned by individual and it is internationally accepted measure. Per capita income at constant price is best measure because it help to make comparisons and lead us to the gaps or factors that helps country to grow.

Answer 133

(C) (SSC Section officer 2003) Exp: Calculation of National Income by Expenditure Method is done by adding private consumption, Government expenditure, Investment and Net Foreign Investment. So Per Capita Income of citizens is not required while computing Gross National Product.

Answer 134

(C) (SSC Statistical Investigators 2005) Exp: The sum total of income recieved for services of Labour, Land or Capital in country is called as Gross Domestic Income. It is considered equal to GDP.

Answer 135

(D) (SSC Tax Assistant 2005) Exp: National Income is total value of final goods and services produced in country within specific time. Services of houswives, pensions and income of smugglers is not considered to be production in an economy.

Answer 136

(D) (SSC Tax Assistant 2005) Exp:Sustainable development is very wide concept which refers to development without having negative impact on nature. Green GNP originated due to criticism of GDP that is it do not include environmental degradation and resource depletion. Gree GNP inculde value of environmental degradation and resource depletion

Answer 137

"(C) (SSC CGL 2007) Exp: John Hicks, British economist says the National Income consists of a collection of goods and services reduced to a common basis by being measured in terms of money. John Hicks' book ""Value and capital"" explained general equilibrium and value theory."

Answer 138

(D) (SSC Sec officer 2007) Exp: GDP is value of final goods produced within domestic boundries of nation. It do not show income distribution. Per Capita Income is best measure to show income distribution. Also Per Capita Income shows average income individual is earning and it internationally accepted measure too. Per Capita Income at constant price is best measure because it helps to make comparisons and lead us to the gaps or factors that helps country to grow.

Answer 139

(C) (SSC CPO SI 2006) Exp: Generally developing nations have primary sector as largest share in National Income. But, India is exception, In India largest share in National Income is from tertiary sector which we can call service sector. Service sector includes transport, IT etc.

Answer 140

(C) (SSC CGL 2008) Exp: Generally National Income is calculated by three methods which include income, expenditure and value addition. Winning a lottery do not involve any production rather it is non-productive activity. So, winning a lottery will not be included in National Income.

Answer 141

(D) (SSC CGL 2008) Exp: Personal disposable income is amount that is available for spending and saving. Personal disposable income is calculated after deducting direct tax because tax leads to amount foregone i.e. non-availibility for spending or saving. So, personal disposable income equals to personal income minus direct taxes.

Answer 142

(D) (SSC CPO SI 2009) Exp: Net National Product Net = Gross - depreciation National = domestic + factor income from abroad Factor cost = Market price + subsidies - Taxes.

Answer 143

(C) (SSC CGL 2007 & 2010) Exp: Methods of calculating National income:- 1. Income Method - by calculating income of country in form of Rent, Wages, Profit and Interest. 2. Expenditure Method- by calculating expenditure done in form of Government expenditure, Investment and Foreign expenditure and private consumption. 3. Product Method or gross value addition Method - also can be said as output Method. It is calculated by calculating value addition at each stage of production.

Answer 144

(B) (SSC CGL 2010 & 2012) Exp: National income is Net National Product at factor cost.

Answer 145

(C) (SSC CGL 2011) Exp: Per Capita Income is also called as average income earned per person in country. It is calculated by dividing total income by total population. Higher Per Capita Income represents higher income earned per person. So higher standard of living.

Answer 146

(B) (SSC CPO (SI.ASI & Intelligence officer) (2011) Exp: National Income in simple words means calculation of Income of a country. Simply National Income is value of all final goods and services produced within country for a specific time period. Generally National Income includes calculation of GDP, Per Capita Income etc.

Answer 147

(B) (SSC CGL 1999) Exp: Personal Income in economics is income disposable plus direct taxes and miscellaneous receipts. Formula for calculating Income is Less - income from property less - saving of non-departmental enterprise Add - Net factor Income from abroad Add - National debt interest Add - Current transfers from govt. Add - Net current transfers = Private Income Private Income - saving of private sector- corporation tax = Personal Income Personal Income - Direct taxes - Miscellenous reciepts of govt. = Personal disposable income

Answer 148

(D) (SSC CGL Pre 2000) Exp: Increase in National income because of increase in price is called as National Income at current prices. National income at current prices is increase in National Income (increase in base year income).

Answer 149

(C) (SSC CGL PRe 2002) Exp: Net = Gross - Depreciation, National = Domestic + Net Factor Income from abroad So the answer will be Gross National Product - Depreciation

Answer 150

(D) (SSC CGL 2005) Exp: A very high rise in National Income at current market prices and low rise at constant prices reveals the high rate of inflation in current time.

Answer 151

(D) (SSC CGL PRE 2002) Exp: Economic welfare in economics is all about increase in standard of living and level of prosperity to individual or group. When National Income is concerned economic welfare of whole country is asked. So going by the economic welfare, increase due to intoxicants will not be considered indication of increase in National Income.

Answer 152

(A) (SSC DEO & LDC 2010) Exp: Transfer Payments in economics means a payment made in which no goods and services are exchanged. Here gifts recieved from a friend will be included in transfer payment because in return to the gift, no goods and services have to be exchanged.

Answer 153

(D) (SSC MTS 2011) Exp: National Income is total value of final output. It includes only productive activity not all money making or profit making activity.

Answer 154

(D) (SSC DEO & LCD 2011) Exp: Per Capita Income measure average income earned by per person in a given area. It is measured by dividing the total income by its population

Answer 155

(A) (SSC DEO & LCD 2011) Exp: Net = Gross - Depreciation, National = Domestic + Net Factor Income from abroad So, the answer will be enter Gross National product - Depreciation

Answer 156

(D) (SSC CGL Pre 2012) Exp: Transfer Payment means any payment or money recieved that is neither a payment for any goods or services exchanged nor investment for future.

Answer 157

(A) (SSC Steno 2010, SSC MTS 2013, SSC CHSL 2016, SSC CPO 2017) Exp: Economic progress of a country is determined by Increase in Per Capita Income of people of the country because Per Capita Income show the average income of the population so increase in average income automatically reveals economic progress.

Answer 158

(D) (SSC CGL Pre 2013) Exp: Net = Gross - Depreciation, National = Domestic + Net Factor Income from abroad So, the answer will be Gross National product - Depreciation

Answer 159

(B) (SSC CGL Pre 2013) Exp: Investment Expenditure refers to expenditure made for the creation of new capital assets like machinery building etc. which will help in further production. Purchase of house is not a expenditure to create assets which will help directly to the production.

Answer 160

(C) (SSC CGL Pre 2013) Exp: Undistributed profit is calculated by adding savings of the Private Corporate Sector (A) Dividends paid to shareholders (B) Total Profits of a company (D) Excess of income over expenditure These do not include saving of private corparate sector so answer will be undistributed profits

Answer 161

(C) (SSC (10+2) DEO & LDC 2013) Exp: National Income is calculated by following three methods (A) Income method (B) Expenditure method (C) Value added method or sales method

Answer 162

(B) (SSC CGL Pre 2013) Exp: Average propensity to consume is percentage of income or part of income spent on goods and services. It can be calculated by Aggregate Consumption Aggregate Income.

Answer 163

(B) (SSC CGl Pre 2014) Exp: Income is considered to be equal to sum of Consumption and Savings. So Invetment is function of saving so Income = Consumption + Saving holds true

Answer 164

(B) (SSC CGL Pre 2014) Exp: Average propensity to consume = Aggregateconsumption AggregateIncome So, If Income increase Average propensity to consume will fall.

Answer 165

(D) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Investment multiplier concept refers to the effect of increased investment on income and economy. The value of investment multiplier relates to change in income due to change in induced investment.

Answer 166

(D) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Saving rate is relatively low in developed economies because of high interest rate.

Answer 167

(C) (SSC CHSL (10+2) DEO7LDC 2014) Exp: Irving Fisher an economist was first to visualize the relationship between the rate of interest and level of consumption.

Answer 168

(A) (SSC CGL Pre 2013) Exp: Trickle down Hypothesis is that rapid growth of Per Capita Income will be associated with a reduction in poverty.

Answer 169

(D) (SSC CGL Pre 2015) Exp: Net National Product = Gross National Product - depreciation

Answer 170

(B) (SSC CPO 2016) Exp: Economic progress of a country is determined by Increase in per capital income of people of the country because per capita income show the average income of the population so increase in average income automatically reveals economics progress.

Answer 171

(A) (SSC CGL Pre (CBE) 2016) Exp: Sector distribution of GDP index measures agricultural development of a country.

Answer 172

(C) (SSC (AUDIT) 1997) Exp: If countries income is denoted in a curved line, it will denote dissimilarity decreasing in income distribution. This inequality is derived from Lorenz curve. Perfect equality line Area of inequality Cumulative percent of income Cumulative% of population 100% 100% This inequality is shown by ginni coefficient, which ranges from o (Perfect equality) to 1 (Perfect inequality) it is ratio of area enclosed by lorenz curve and the perfect equality line to total area below that line.

Answer 173

(C) (SSC Section Officer (Audit) 2006) Exp: Savings constitutes a bigger role in capital formation because savings convert into investment and then into capital formation. So capital formation in an economy depends on total savings

Answer 174

(C)Exp: The data collection for national income estimation is conducted in India by NSSO (National sample survey Organisation) Functions of NSSO as per central statistical office:- (A) To conduct large sample surveys on subjects like household, consumer expenditue, employment, health etc. (B) NSSO has the overall responsibility of assisting the states (C) Conducts annual survey of industries

Answer 175

(B) [SSC CGL 2008] Exp: Classification of economy is done into three sector Agriculture, Industry and service. The sector distribution of GDP index measure the indication which are use to evaluate or health of country's economy.

Answer 176

(B) [SSC CGL 2008] Exp: Saving is that part of income reserved for any particular reason for other than consumption.

Answer 177

(B) [SSC CGL 2008] Exp: Indifference curve shows and measures the same level of satisfaction derived from different commodities.

Answer 178

(A) [SSC CGL 2009] Exp: Indifference curve shows the same level of satisfaction derived from different two commodities resulting no effect on satisfaction.

Answer 179

(A) [SSC CHSL 2017] Exp: Gross domestic product (GDP) is the total value of goods and services produced within country for a given time period.

Answer 180

(A) [SSC CHSL 2017] Exp: Marginal revenue of product is output added by employing one more employer in terms of revenue. It can be calculated by Marginal revenue of product = Marinal product of labour × price of article by using values to formula answer will be 3800

Answer 181

(A) [SSC CHSL 2017] Exp: GDP calculation by expenditure method = consumption private + Investment + Government Expenses + foreign expenditure (Import-Export) So, Answer will be $625 million.

Answer 182

(B) [SSC CHSL 2017] Exp: Gross domestic product (GDP) by expenditure method is = consumption private + Investment + Government expenditure + Foreign expenditure (ImportExport) Following this answer will be $240 million.

Answer 183

(B) [SSC CHSL 2017] Exp: GDP calculation by expenditure method = consumption private + Investment + Government Expenses + foreign expenditure (Import - export) Will be $250 million.

Answer 184

(B) [SSC CHSL 2017] Exp: GDP by expenditure method = Consumption private + Investment + government Expenses + foreign expenditure (export - imports) by putting values to formula will result to $1315 million.

Answer 185

(D) [SSC CHSL 2017] Exp: Redistribution of taxes as subsidies will not create any capital. Hence, not productive resulting no contribution in Nation's wealth.

Answer 186

(C) [SSC CHSL 2017] Exp: Real rate of interest = nominal rate of interest - rate of inflation by putting value we will receive 3% as answer.

Answer 187

(B) (SSC CGL 2017) Exp: Gross = Net + depreciation Domestic = National - Net income from abroad National Income = NNP

Answer 188

(A) (SSC CGL 2017) Exp: GDP deflator is ratio of nominal GDP to real GDP.

Answer 189

(B) (SSC CGL 2017) Exp: Reserve Bank of India:- It monitors the banks in actually maintaining cash balance by various tools available at his disposal like cash reserve ratios, statutory liquidity ratio.

Answer 190

(C) (SSC CGL 2017) Exp: GDP - Gross Domestic product is total final value of goods and services produced in a country at a given time. International sector is not included in GDP whereas the products from agricultural, industrial and service sector are computed in calculation of GDP.

Answer 191

(B) [SSC CPO 2017] Exp: Market price - Indirect taxes + subsidies = Factor cost. By following above formula we will receive GDP at factor cost.

Answer 192

(C) [SSC CPO 2017] Exp: GNP - depreciation = NNP Net = Gross- depreciation National = domestic + net factor income from abroad Factor cost = Market price + Subsidies - Taxes

Answer 193

(B) [SSC CPO 2017] Exp: Gross National Income (GNI) is total domestic and foreign output produced by the residents of country.

Answer 194

(D) [SSC CPO 2017] Exp: GDP- Gross Domestic Product is the value of all final goods produced in an economy in a financial year's Central statistics office measures gross domestic product in India.

Answer 195

(A) [SSC CPO 2017] Exp: The difference between domestic product and national product is net factor income from abroad and i.e. export-import so when exports equals imports then GDP will equal GNP.

Answer 196

(B) [SSC CPO 2017] Exp: Net National Product (NNP) + subsidy indirect taxes = National Income. 117. What is Disposable Personal Income? (A) Personal Income + Subsidies (B) Personal Income - Subsidies (C) Personal Income - Direct Taxes (D) Personal Income - Indirect Taxes (C) [SSC CPO 2017] Exp: Disposable Personal Income is the income available with the user that he or she may dispose whenever he/ she want. So direct taxes will be subtracted from personal income.

Answer 197

(B) [SSC MTS. Exam, 2006] Exp: SIDBI Small Industries Development Bank of India is a financial institution with an objective of growth & development of Micro, Small and medium-scale enterprises. It was established in 1990.

Answer 198

(A) [SSC 10+2 Exam,2015] Exp: IDBI: Industrial Development Bank of India is a universal bank. It was established on 1 July, 1964. It provide credit and other facilities for the development of industry.

Answer 199

(B) [SSC CGL 2006] Exp: Imperial Bank of India was commercial bank that came into existence on January 1921 by J.M. Keynes. It was oldest and largest bank of colonial India. It was nationalised and transformed in 1955 into State Bank of India.

Answer 200

(B) [SSC CGL 2015] Exp: Same as above question

Answer 201

(D) [SSC CGL Exam 2014] Exp: Interest on saving deposits in all nationalized bank of India is determined on the basis of MCLR i.e. marginal cost of funds based lending rates decided according to marketing trends in open economy. Open economy is regulated by RBI. So interest on saving deposits in all nationalized bank of India is determined by RBI.

Answer 202

(B) [SSC MTS Exam, 2006] Exp: Public sector undertaking are those enterprises which are owned by state (government). In the above banks Syndicate Bank is public sector undertaking nationalised in July 1969.

Answer 203

(C) [SSC 10+2 Exam 2014, SSC CGL 2001 & 2009] Exp: Nationalisation of banks was done in 2 phases. Phase-I was on 19 July 1969 in which 14 large commercial banks with the reserve of more than Rs. 50 crore were nationalized. Phase-II was on April 15, 1980 in which 6 private sector banks with the reserve of more than Rs. 200 crore were nationalized.

Answer 204

(D) [SSC CGL Exam, 2006] Exp: NABARD stands for National bank for Agriculture and Rural Developoment. It was established on 12th July, 1982 by transferring the agricultural credit functions of RBI and refinance functions of the Agriculture and development Corporation.

Answer 205

(A) [SSC CGL Exam, 2014] Exp: Same as above.

Answer 206

(C)Exp: All the agency listed above are industrial finance institution except NABARD. UTI - Unit Trust of India established in December 1963, act as vehicle for investments in capital market through mutual funds ICICI - Industrial credit and investment corporation of India established in 1994. SFC - a financial institution, with a objective to provide medium - and long term debt financing to small and medium enterprises.

Answer 207

(A) [SSC CGL Exam, 2015] Exp: Under RBI Act, RBI has sole right to issue currency notes except one reupee note and currency coins. Ministry of Finance have the sole right to issue one rupee currency note and coins which will bear signature of Finance Secretary.

Answer 208

(C) [SSC 10+2 Exam,2014] Exp: Decimalisation or decimal money system was started in 1 Arpil, 1957 in which one rupee was divided into 100 paisa.

Answer 209

(C) [SSC CPO Exam, 2005] Exp: Bank rate is the rate charged by RBI to lend money to other commercial banks. It is interest rate of RBI for giving loan or credit to all the banks.

Answer 210

(D) [SSC 10+2 2015] Exp: Remedy finance is done by RBI because RBI is bankers bank.

Answer 211

(A) [SSC CGL 2012] Exp: FII - Foreign Institutional Investment is known as Hot money. Hot money because FII has tendency to shift very swiftly when it see or felt like more earning at other place (in this case another country).

Answer 212

(A) [SSC 10+2 Exam 2013, SSC Const. Exam 2015] Exp: Monetary policy is by RBI to influence movement of money supply and interest rates. Tools of monetary policy. Quantitative Qualitative Reserve ratio - Cash Reserve Ratio Margin/loan to value Statutory liquidity ratio Rationing Open market operations Moral suasion Repo rate, Reserve repo Bank rate Consumer credit control Marginal standing facility Direct action

Answer 213

(B) [SSC CGL Exam, 2012] Exp: Narsimhan committee - In 1991 first Narsimhan committee was made to revamp banking sector of India and to overcome huge problem of creation of NPAs and financial inclusion. In 1998, 2nd Narsimhan Committee was formed.

Answer 214

(C) [SSC CGL Exam, 2014] Exp: E in E-banking stands for electronic because it is an electronic payment system through which transactions can be done through bank's website.

Answer 215

(A) [SSC CGL Exam, 2014] Exp: CRR, Bank rate and change in marginal necessities are measures to check money supply in market. Free market policy is not a measure to control money supply.

Answer 216

(B) [SSC T.A. Exam, 2007] Exp: As the agreement is not signed between RBI and Jammu & Kashmir so RBI do not transact the business.

Answer 217

(B) [SSC CPO Exam, 2015] Exp: Indian money supply's one of the characteristics is money possessed by public is less than bank deposits in form of current account, saving account, fixed deposits and securing deposits.

Answer 218

(D) [SSC MTS. Exam, 2011] Exp: Hard currency sometimes also called as Safe heaven currency. Hard currency is that currency which do not easily flactuates or devaluates. It is one of the highly trusted currency too. So not easy to access.

Answer 219

(B) [SSC MTS. Exam, 2011, SSC CGL Exam 2007] Exp: RBI follows financial year of July to June it was changed from January to December in 11 March, 1940.

Answer 220

(C) [SSC CGL Exam, 2014] Exp: RBI have a list of banks. The banks which are listed in IInd schedule of RBI act 1934 are called as schedule banks other remaining banks are non-schedule bank.

Answer 221

(C) [SSC Steno. Exam, 2014] Exp: In all of the above bank ICICI is not government organisation.

Answer 222

(B) [SSC 10+2 Exam,2011] Exp: State Bank of India a government owned corporation after merger of five associates and Bhartiya Mahila Bank has become largest commercial bank. After merger completion it will be among 50 largest bank in the world in terms of balance sheet.

Answer 223

(C) [SSC 10+2 Exam,2003] Exp: The maximum branches of Indian Bank is in UK with 30 branches than in Sri Lanka, USA and Bangladesh respectively.

Answer 224

(B) [SSC FCI Exam, 2012] Exp: Money is good servant but bad master. Good servant because through money one can fulfill his needs and wants. But money is bad master because money is instrument for satisfaction it will not help in development.

Answer 225

(C) [SSC 10+2 Exam 2010, SSC Steno Exam 2011] Exp: Optional money: means choice of accepting money. Like cheque where it is generally accepted but legally receiver is not bound to accept it.

Answer 226

(B) [SSC CPO Exam, 2008] Exp: One of the bad effect of black money. Garsham law bad money drives out good money from circulation. Different types of money with same face value but different intrinsic values, the money with lower intrinsic value will be more in circulation because money with higher intrinsic value has been hoarded.

Answer 227

(D) [SSC CPO Exam, 2008] Exp: Green banking is banking with some innovative techniques to reduce environmental burden like paperless banking or discouraging use of paper in banking.

Answer 228

(A)Exp: Soft currency also sometimes called as weak currency. Soft currency is currency with flactuation in its value due to political instability in economy.

Answer 229

(D) [SSC MTS Exam, 2001] Exp: According to keynes money is demanded for three objectives namely Transaction, Precautionary and speculative. Transaction: there is demand for money to have a value to transact and fullfil needs. Precautionary: people demand money to handle contingencies in future. Speculative: People demand money by speculating interest rates. When interest rate decreases people demand more money to hold untill the interest rate increases.

Answer 230

(B) [SSC CGL Exam, 2011] Exp: Interest on saving deposits in all nationalized bank of Bank of India is determined on the basis of MCLR i.e. Marginal cost of funds based lending rates decided according to trends in open economy. Open economy that is regulated by RBI. So interest on saving deposits in all nationalized bank of India is determined by RBI.

Answer 231

(A) [SSC CPO Exam, 2007] Exp: Cheap money means easy availibility of money. Easy availibility of money will be felt when rate of interest are lower. In simple word money with low rate of interest is cheap money.

Answer 232

(B) [SSC CGL Aug. 2014] Exp: Gold Bullion Standard is modified system of gold standard where coins use not circulated but standard currency unit is expressed in term of quantity of gold. In gold bullion standard gold do not act as medium of exchange but act as measure of value.

Answer 233

(C) [SSC FCI Exam 2012, SSC CHSL 2017] Exp: Reserve Bank of India was nationalised in 1949

Answer 234

(C) [SSC CGL Exam 2011] Exp: The reserves held by commercial banks over and above the statutory minimum, with the RBI are called Excess Reserves. These are also sometimes called as over reserves.

Answer 235

(B) [SSC CGL 2011, SSC CPO 2005 & 2007] Exp: Under RBI Act, RBI has sole right to issue currency notes except one reupee note and currency coins. Ministry of Finance have the sole right to issue one rupee currency note and coins which bears the signature of finance secretary.

Answer 236

(C) [SSC CPO Exam, 2011] Exp: Central bank in an economy, In India it is Reserve Bank of India. Main functions: • Objective of maintaining price stability that is guided by monetary policy. • Regulator and supervisor of finance system • Managing Foreign exchange • Currency issuer • Banker to Government • Banker to Banks

Answer 237

(B) [SSC SAS Exam, 2010] Exp: Black money is money earned through illegal activities or money that is not accounted by Government of India. Like tax evasion etc. Black money hurt formal economy not as less tax revenue but also as it hampers the process of resource allocation and distorts the accuracy of economic forecasts. Black money have quality of encouraging injustice behaviour, the rich get richer and poor get poorer. So the existence of black money undermine the very objective of monetary policy.

Answer 238

(C)Exp: The government of India set up Regional Rural Banks on 2nd October, 1975. Five RRBs were setup upon the recommendations of the working group on rural banks.

Answer 239

(B) [SSC SAS Exam, 2011] Exp: MICR a acronym for Magnetic Ink Character Recognition. It is a character recognition technology that allows computer to read information (such as accounting numbers) from document. MICR characters are special type faces characters with a magnetic ink.

Answer 240

(C) [SSC DEO & T.A. Exam 2009, SSC CGL Exam 2004] Exp: Minimum reserve system is system of issuing currency. Under this system RBI has to keep a minimum reserve of 200 crore in form of gold or gold bullion and foreign currency. RBI can issue unlimited amount of currency under this but with a limitation of some rules for issuing new currencies based on economic growth.

Answer 241

(A) [SSC SO Exam, 2008] Exp: Government of India constitute a nine member committee under chairmanship of retired RBI Governor Mr. M. Narasimhan to suggest financial system reforms and improve strutcture of financial system. Major recommendations - No bar to new banks in private sector - Introduction of four tier hierarchy of banking system in the country - Abolish dual control of RBI and finance ministry on Banks Assets reconstruction to take over bad debt from banks.

Answer 242

(C) [SSC CGL Exam, 2008] Exp: The State Bank of India, in September 2007, became the first public sector bank to touch a market capitalisation of '100000 crore' following a surge of over 3% in its share price.

Answer 243

(D) [SSC T.A. 2007] Exp: An overdraft is a facility available to consumer to draw cheques in excess of his bank account balance. This facility is available in current account.

Answer 244

(D) [SSC SO Exam, 2007] Exp: Hot currency refers to quick migration of fund in order to earn short term interest or profits

Answer 245

(D) [SSC CGL Exam, 2007] Exp: Electronic Clearing Services is an electroric mode of transations or transfers that are reaccuring and periodic in nature. ECS is used by institution for bulk payment like dividend distribution, salary, utility bills, installment payament

Answer 246

(B) [SSC SO Exam, 2006] Exp: Interest rate policy is instrument under monetary policy. Under this RBI changes money supply by increasing or decreasing interest rate.

Answer 247

(D) [SSC SO Exam, 2006] Exp: Demand deposits are funds or money deposited by account holder and the money deposited can be withdrawn without prior notice.

Answer 248

(A)Exp: Regional Rural Banks are banks operating at local level in states. RRB are formed with a view to serve the rural areas to provide basic financial services. Regional rural banks are owned by central government, state government and sponsor bank (Five national commercial banks sponsors regional rural banks).

Answer 249

(B) [SSC MTS Exam, 2006] Exp: Imperial Bank of India was commercial bank that came into existence an January 1921 started by J.M. Keynes. It was oldest and largest bank of colonial India. It was nationalised and transformed in 1955 into State Bank of India.

Answer 250

(A) [SSC MTS 2006] Exp: Debt servicing is amount of Interest paid by the government on loans raised.

Answer 251

(A) [SSC CPO Exam, 2006] Exp: Cash reserve ratio is the amount that has to kept aside in form of cash by banks with the RBI. Increasing or decreasing CRR will affect money supply with the RBI.

Answer 252

(C) [SSC Investi. Exam, 2006] Exp: RBINET is software or electronic communication network of Reserve Bank of India.

Answer 253

(D) [SSC SO Exam, 2005] Exp: IDBI: Industrial Development Bank of India is government owned universal bank. It was established in 1 July, 1964. It provide credit and other facilities for the development of industry.

Answer 254

(B) [SSC Investi. Exam, 2005] Exp: Dear money is opposite to cheap money. Dear money is the money which is not available easily or in simple words money available at higher rates. So dear money means hight rate of interest.

Answer 255

(D) [SSC Investi. Exam 2005, SSC MTS 2007] Exp: Legal tender money is medium or instrument of payment allowed by law. Paper currency and coins are most common form of legal tender money.

Answer 256

(C) [SSC CGL Exam, 2004] Exp: Under this system 115 crore should be in gold and 85 crore in form of government securities.

Answer 257

(B) [SSC T.A. Exam, 2004] Exp: Cash reserve ratio is the amount that has to kept aside in form of cash by banks with the RBI. Increasing or decreasing CRR will affect money supply with the RBI. CRR is calculated on Net Demand and Time Libilities of bank.

Answer 258

(B) [SSC CPO Exam, 2003] Exp: Collateral is pledge taken by borrower in form of property to creditor for securing repayment of borrowed money. In case of default in payment, collateral can be used to recieve credit amount. So best way to avoid loss by bank is to accept sound collateral.

Answer 259

(C) [SSC CGL Exam, 2003] Exp: Mahatma Gandhi series notes issued by RBI which has drawing of parliament house is depicted on ` 50 denomination.

Answer 260

(B) [SSC CGL Exam, 2003] Exp: Mahatma Gandhi series note is issued by RBI which has Ecology of Himalayan mountain range on ` 100 denominations.

Answer 261

(A) [SSC SO Exam, 2003] Exp: Statutory Liquidity ratio is amount of liquid assets in form of Cash Gold, Government securities and other approved securities that must be maintained as reserve.

Answer 262

(A) [SSC SO Exam, 2003] Exp: Companies resort to issue securities to secure credit or loan from investors. Securities can be in the form of shares and bonds. Shares represents parts of ownership in company whereas bond represent lo A company decides to sell share and bonds when it want access to long term capital.

Answer 263

(C) [SSC CPO Exam, 2003] Exp: RBI have a list of banks. The banks which are listed in IInd schedule of RBI act 1934 are called as schedule banks other remaining banks are non-schedule bank.

Answer 264

(B) [SSC SO Exam, 2003] Exp: Merchant banking is an institution that deals mostly in international finance. Merchant banks provide long term loans and consultation service to multinational corporations. It does not provide regular banking serveces to common public.

Answer 265

(A) [SSC SO Exam, 2003] Exp: Narrow money includes currency in circulation, demand diposits and other liquid assests held by central bank. It is denoted by M1 (i) M1 (Narrow money) = Currency with the public + Demand deposits of the public (ii) M2 = M1 + Post office Savings deposits (iii) M3 (Broad money = M1 + Time deposits of the public with banks (iv) M4 = M3 + Total post office deposits. So, 'Narrow Money' is simply a category of money supply that includes all physical money like coins and currency along with demand deposits and other liquid assets held by the Central Bank.

Answer 266

(C) [SSC MTS Exam, 2002] Exp: Ways and Means advances is a temporary loan facility under which reserve bank of India provides loan to central and state governments to deal with temporary mismatches in the receipts and payments of the government

Answer 267

(C) [SSC CGL Exam, 2002] Exp: IDBI bank has been converted to universal bank.

Answer 268

(C) [SSC CGL Exam, 2002] Exp: The emblem of reserve bank of India consists of a Tiger standing in front of a palm tree. These depictions are surrounded by Reserve Bank of India in Hindi and English at the top and bottom respectively.

Answer 269

(C) [SSC MTS Exam, 2002] Exp: Hot money is the type of foreign investment which is invested to earn short term interests and gains. Foreign Institutional Investment is also called as hot money.

Answer 270

(B) [SSC MTS Exam, 2002] Exp: Legal tender money is a medium of payment recognised by legal system which must be accepted by citizens and goverment both.

Answer 271

(D) [SSC MTS Exam, 2001] Exp: Reserve bank of India acts as central bank of our country and deals with monetary policy. It does not provide finance to agriculture.

Answer 272

(C) [SSC MTS Exam, 2001] Exp: Structure of commercial banking in India is branch banking. Branch banking is a system in which banking organisation works at more than one place

Answer 273

(D) (SSC CHSL (10+2) DEO & LDC 2014) Exp: NABARD stands for National bank for Agriculture and Rural development. It is an apex institution for development of agriculture, cottage industries village industries etc. Its primary role is to provide credit flow for the promotion of agriculture, to provide term loans to state co-operative banks, to asist state goverments for sharing capital contribution and to act as re-finance institution etc.

Answer 274

(C) (SSC Section officer (Audit) 2001) Exp: The Board for Industrial & Financial Reconstruction was established under sick Industrial companies Act, in 1985.The main objective of BIFR was to give same breathing space to sick companies.

Answer 275

(B) (SSC CPO S.I 2003) Exp: The emblem of reserve bank of India consists of a Tiger standing in front of a palm tree. These depictions are surrounded by Reserve Bank of India in Hindi and English at the top and bottom respectively.

Answer 276

(B) (SSC CPO S.I 2003) Exp: Varada Grameen bank is named after wardha river. It is one of the biggest rivers of vidarbh region in Maharashtra

Answer 277

(B) (SSC section officer (Commercial Audit) 2003) Exp: Open market operation refers to sale and purchase of goverment securities by Reserve Bank of India in open market.

Answer 278

(C) (SSC Section Officer (Audit) 2003, SSC CGL 2004) Exp: Minimum reserve ratio is amount of that has to be kept in reserve for the backing of currency issued. Under the minimum reserve system, the RBI has to keep reserve of 200 crore which will include gold and foreign currencies. RBI can issue unlimited amount or currency by keeping minimum reserve.

Answer 279

(B) (SSC CGL Pre 2004) Exp: Reserve bank of India has sole right to issue various currency notes except 1 rupee notes. One rupee note is issued by ministry of finance

Answer 280

(C) (SSC CPO S.I 2014) Exp: Open market operation refers to sale and purchase of Goverment securities by Reserve Bank of India or Goverment.

Answer 281

(A) (SSC Tax Assistance (Income Tax & Central Excise) 2014) Exp: Pound is high value currency in above mentioned currencies.

Answer 282

(B) (SSC Tax Assistant (Imcome Tax 2004) Exp: Reserve bank of India functions as controller of credit in India. RBI perform this function mainly through the monetary policies qualitative and quantitative tools.

Answer 283

(B) (SSC Section Officer (Audit) 2006, SSC CHSL 2014) Exp: One -rupee coins, notes and other coins in India are issued by Ministry of Finance under central goverment. All other notes except one rupee are issued by Reserve Bank of India.

Answer 284

(D) (SSC CGL Pre 2014) Exp: The gilt-edged market deals with purchase and sale of government securities and semi- government securities.

Answer 285

(C) (SSC CGL Pre 2014) Exp: Reserve bank of India facilitates the credit control operation in India. It controls the money supply in economy and inflation by taking various measures like controlling interest rates, Cash reserve ratio etc.

Answer 286

(C) (SSC CGL Pre 2014) Exp: NABARD stands for National bank for agriculture and rural development. It is an apex institution for development of agriculture, cottage industries village industries etc.

Answer 287

(D) (SSC (10+2) DEO & LDC 2011) Exp: Reserve bank of India takes quantitative measures and qualitative measures for credit control. Quantitative measures includes Cash reserves ratio, Bank rate, Open market operations, Statutory Liquidity ratio while qualitative measures includes Moral suasion, Rationing of credit, regulation of Consumer credit, Margin requiremants etc.

Answer 288

(C) (SSC Constabel (GD) 2012) Exp: Indian paper currency is printed in 7 denominations at present. These are notes of Rs5, Rs10, Rs20, Rs50, Rs100, Rs500, Rs2000. The printing of Rs 1 and Rs 2 note has been discontinued but they are still in circulation.

Answer 289

(B) (SSC CGL Pre 2014, SSC CGL 2010) Exp: Monetary Policy in India is formulated by Reserve Bank of India. It deals with controlling money supply, and inflation. It gives impetus to economic development, price sability etc.

Answer 290

(D) (SSC MTS 2014) Exp: Imperial bank of India was established on January 27, 1921. In 1955 it was renamed as State Bank of India.

Answer 291

(A)Exp: Reserve Bank of India takes quantitative measures and qualitative measures for credit control. Quantitative measures includes cash reserves ratio, Bank rate, Open market operations, Statutory Liquidity ratio while qualitative measures includes Moral suasion, Rationing of credit, regulation of consumer credit, margin requirements etc.

Answer 292

(C) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Money market is the market in which the trading of short term instruments is done. The term for instrument (securities) is from 1 day to 365 days.

Answer 293

(B) (SSC CGL Pre 2014) Exp: Credit rating agencies in India are regulated by Securities and Exchange Board of India (SEBI), Crisil, ICRA are some credit rating agencies of India.

Answer 294

(D) (SSC CGL Pre 2014) Exp: Regional rural banks are jointly owned by central government, state government and the sponsor bank with respective shares of 50% state government and 35% sponsor bank.

Answer 295

(B) (SSC CGL Pre 2015) Exp: SIDBI stands for Small Industries Development Bank of India. It was established on April 2, 1990 with an aim for growth and development of Micro, Small and Medium scale industries.

Answer 296

(D) (SSC CHSL (10+2) DEO & LDC 2015) Exp: Central bank of any country acts as lender of last resort which provides loans to banks and other institutions facing shortfall of cash.

Answer 297

(A) (SSC CAPF SI,AISF ASI 2015) Exp: When central bank of any country lowers the interest rate as a measure of monetary policy it is known as low interest rate policy. It is also known as cheap money policy. Low interest rates make loans cheaper.

Answer 298

(B) (SSC CAPFs SI, CISF ASI Delhi Police 2015) Exp: Curreny with the public is less than the deposit with the bank because there is huge amount reserved in time deposit or demand deposits against amount in hand.

Answer 299

(C) (SSC Section Officer (Audit) 1997) Exp: Decline in productivity is not the outcome of decrease in prime lending rate. Prime lending rate is rate at which banks lend to their favourite customers usually decrease in prime lending rate will result raise in bank loan, decline in saving rate and increase in demand of consumer products.

Answer 300

(C) (SSC Tax Assistant 2005) Exp: Gresham's law states that bad money out drives good money from circulation. It is related to the circulation of currency or money.

Answer 301

(A) (SSC Section Officer (Audit) 2006) Exp: Bank rate is rate at which RBI lends money to commercial banks. When bank rate is reduced it will increase available credit pool to commercial banks hence credit will increase.

Answer 302

(B)Exp: Bank rate refers to an interest rate at which central bank of any country lends money to commercial banks. In case of India. RBI provides loans to commercial banks.

Answer 303

(A) (SSC CGL Pre 2002) Exp: Cash reserve ratio is amount of cash that has to kept with RBI. Smaller cash reserve ratio means more credit available to lend with banks. So, scope for lending by bank is greater.

Answer 304

(D) (SSC CGL Pre 2002) Exp: Commercial banks create credit on the basis of their deposits.

Answer 305

(D) (SSC CGL Pre 2002) Exp: Bank money refers to cheques drafts and bank credits that are equivalent ot money.

Answer 306

(A) (SSC Section Officer (Audit) 2003) Exp: Cash reserve ratio is amount that has to be kept with RBI So if central bank wants to increase in supply of money and decrease in cost of borrowing money RBI will reduce cash reserve ratio.

Answer 307

(B) (SSC MTS 2013) Exp: Money is an example of floating capital. Floating capital means capital that is movable and storable.

Answer 308

(C) (SSC CAPFs, S.I ASI 2013) Exp: Functions of money (A) medium of exchange (B) measure of value (C) Standard of payment (D) Store of value

Answer 309

(B) (SSC CAPFs SI, CISF ASI 7 Delhi 2014) Exp: NEER stands for Nominal Effective Exchange Rate and it is not related to banking.

Answer 310

(B) (SSC CGL Pre 2006) Exp: Schedule bank are those bank which are listed in list of RBI Act 1934.

Answer 311

(C) (SSC Section Officer (Audit) 2003) Exp: Bank of India is nationalised bank of India, and it has a shining star as its emblem.

Answer 312

(A) (SSC CGL Pre 2002) Exp: SLR- Statutory Lending Ratio is the amount that has to kept in reserve in form of gold, cash and securities. A high SLR means less availibility of credit pool with banks to lend.

Answer 313

(C) (SSC CGL 2006) Exp: Monetary policy with the objective of price stability. It is carried out generally by central banks and in India it is done by RBI.

Answer 314

(B) (SSC CGL 2007) Exp: Priority sector lending: under PSL Bank have to lend 40% of their total credit pool to certain specifics sectors. Following are sectors covered under PSL: Agriculture, Micro and small Enterprises, Education, Housing BPL, Medium Enterprises, social infrastructure, Renewable Energy.

Answer 315

(A) (SSC CGL 2007) Exp: Smart money: is certain value linked from bank account that can be used as money eg:- credit card debit card or plastic money etc.

Answer 316

(C) (SSC CGL 2003 & 2008) Exp: OMO (open market operation) refers to buying and selling of government securities in open market by RBI to inject or suck money out of banking system.

Answer 317

(A) (SSC CGL 2009) Exp: Repo rate (repurchase obligation rate) is tool of RBI to lend money for short term base to banks or financial institutions.

Answer 318

(C) (SSC CGL 2009) Exp: Immediate payment service is a electronic fund transfer system offered by bank through mobile phone.

Answer 319

(A) (SSC CGL 2009) Exp: Ombudsman- RBI appointed officers to adress the grievances of customer known as banking ombuds men.

Answer 320

(C) (SSC CGL 2009) Exp: RBI was institutionalized by RBI under act of 1934 and later on it was nationalized in 1 January 1949. Its headquarter is situated at Mumbai.

Answer 321

(D) (SSC CGL 2010) Exp: NBFI: Non-Banking Financial Institutions are those financial intermediaries which are not registered under schedule 2 of RBI Act 1934. Ex: of NBFI are: All India finance institution like EXIM, NABARD, SIDBI and Primary deals and Non-banking Financial companies.

Answer 322

(A) [SSC CSHL 2017] Exp: Cash Reserve ratio: the amount of money that has to be kept aside in cash form within banks only. If cash Resrve ratio increase or decrease the credit pool decrease and increase respectively.

Answer 323

(C) [SSC CSHL 2017] Exp: SLR: Statutory Liquidity ratio is amount that has to be kept with RBI in form of cash, Gold, Government securities and RBI approved securities.

Answer 324

(B) [SSC CSHL 2017] Exp: Under Functions of RBI • It Acts as lender of last resort. • Controller of credit • Banker to government • Custodian of foreign reserve.

Answer 325

(D) [SSC CSHL 2017] Exp: HSBC Bank is private bank with headquarter at London in United kingdom.

Answer 326

(C) (SSC CGL 2017) Exp: Reverse repo rate is the rate at which RBI borrows money from commercial bank in exchange of government securities with an obligation to repurchase.

Answer 327

(C) (SSC CGL 2017) Exp: Demand Draft:- it is prepaid negotiable instrument where bank undertakes responsiblity to make full payment. So once demand draft is made, there is no chance that it gets dishonoured for the lack of funds.

Answer 328

(D) (SSC CGL 2017) Exp: Monetary policy is the economic policy which is concerned with increase and decrease in money supply. It is usually under Central Bank of the country. Monetary policy includes tools like quantititive tools and qualitative tools. Quantitative tools includes Bank rate, Reserve Ratios, MSF, Repo rate, open market operations Qualitative tools includes moral suasion, credit rationing, direct action etc.

Answer 329

(D) (SSC CGL 2017) Exp: Monetary policy is the economic policy which is concerned with increase and decrease in money supply. It is usually under Central Bank of the country. Monetary policy includes tools like quantititive tools and qualitative tools. Quantitative tools includes Bank rate, Reserve Ratios, MSF, Repo Rate, open market operations Qualitative tools includes moral suasion, credit rationing, direct action etc.

Answer 330

(A) (SSC CGL 2017) Exp: Prime Lending Rate is minimum rate charged by banks to their most credit worthy customers.

Answer 331

(D) (SSC CGL 2017) Exp: Loans Term Short term loans 1 day to 364 days Medium term loans 1 year to 3 years Long term loans More than 3 years

Answer 332

(D) (SSC CGL 2017) Exp: Economic policies are classified into two parts. Fiscal policy and monetary policy. Fiscal policy is government policy to regulate income and expenditure done by the government. Monetary policy is the RBI's policy to increase or decrease money supply in the Market. Credit Rationing is one of the tools under monetary policy.

Answer 333

(C) (SSC CGL 2017) Exp: Isoquant represents possible combinations of two inputs that yield the same level of output.

Answer 334

(C) (SSC CPO 2017) Exp: Minimum base rate is the rate below which banks are not allowed to lend their customers. The minimum base rate fixed by RBI is 9.30%.

Answer 335

(B) (SSC CPO 2017) Exp: CRR- Cash Reserve Ratio is specified fraction of total deposits that bank has to keep with RBI in form of cash.

Answer 336

(C) (SSC CPO 2017) Exp: Reserve Bank of India under it's monetary policy decides the Bank rate, cash reserve ratio, statutory liquidity ratio.

Answer 337

(A) [S.S.C (10+2) Exam, 2012] Exp: For the fulfillment of Social goods, Merit goods and services which can't be reached to market or in relation to them market will fail, these goods are made available by state. So through budget, state is responsible for fiscal policy. Tools of fiscal policy - Taxation - Expenditure - Borrowing

Answer 338

(D) [S.S.C (CGL) Exam, 2006] Exp: Fiscal policy is government policy in regard to recievings i.e. revenue through taxation and expenditure i.e. spending through programs etc.

Answer 339

(A) [SSC 10+2 Exam, 2014] Exp: Subsidies are provided by government to individuals or group of people in the form of cash to reduce the prices of consuming units like LPG cylinder, fertilizers, food grains etc.

Answer 340

(B) [SSC 10+2 Exam, 2010] Exp: There are three type of funds with Goverment of India. 1. Consolidated fund of India 2. Public account fund 3. Contingency fund of India. Contigency fund is fund for emergencies or crisis situation. To withdraw money from contingency fund no parliament approval is needed. It is vested to President.

Answer 341

(C) [SSC CPO Exam, 2012] Exp: Ministry of Finance publishes economic survey. Economic survey is a document which shows achivements and growth in year gone by and according to these reports future plans or strategies are made out.

Answer 342

(B) [SSC Steno Exam, 2014] Exp: The maximum revenue of Indian railways usually come from transportation of goods.

Answer 343

(D) [SSC CGL Exam, 2011] Exp: Disinvestment is also a process of transfering ownership. So Disinvestment in public sector is called as privatization. Privatization is process of selling ownership by government to private business or enterprises.

Answer 344

(A) [SSC CPO Exam, 2008] Exp: Development expenditure refers to the expenditure which leads to social and economic development of country. Irrigation expenditure is an example of development expenditure.

Answer 345

(B) [SSC CPO Exam, 2008] Exp: Disinvestment implies selling of shares of public sector enterprises by government. The main aim of disinvestment is to reduce financial burden on government enterprises.

Answer 346

(D)Exp: The objectives of fiscal policy are full employment, price stabilization, economic growth, equitable distribution of income. It is not related to international trade.

Answer 347

(D) [SSC T.A. Exam, 2007] Exp: Non plan expenditure in budget includes interest payments on loans taken by government of India, grants to states, subsidies, pensions, social services etc. But planned and Non-planned expenditure have been scrapped in budget and replaced by capital and revenue spendings.

Answer 348

(B) [SSC SO Exam, 2007] Exp: The difference between total receipts and total expenditure is called as budgetary deficit while fiscal deficit is referred as difference between total receipts (except government borrowings) and total expenditure.

Answer 349

(D) [SSC SO Exam, 2006] Exp: The difference between total receipts and total expenditure is called as budgetary deficit while fiscal deficit is referred as difference between total receipts (except government borrowings) and total expenditure.

Answer 350

(C) [SSC MTS. Exam, 2002] Exp: The largest item of expenditure in Budget of India is interest payment.

Answer 351

(C) (SSC Section Officer (Audit) 2003) Exp: In estimating the budgetary deficit, the official approach in India is to exclude drawing down of cash balance.

Answer 352

(D) (SSC CGL Pre 2001) Exp: Fiscal policy is by which government adjusts its income and expenditure. So fiscal policy is concerned with public revenue and public expenditure and debt both.

Answer 353

(A) (SSC CGL PRe 2013) Exp: Social accounting is method of accounting which calculates the effort on environment and society of organisation operation. Professor Hicks suggested social accounting word. It is classified into Income, Product and expenditure methodologies.

Answer 354

(C) (SSC Section Officer (Audit) 2003) Exp: National Saving Certificates are not viewed as national debt. National saving certificate (NSC) are small savings investment scheme launched by government of India.

Answer 355

(A) (SSC CGl Pre 2001) Exp: Deficit financing is injection of money to compensate deficit so beyond a certain point deficit financing will certainly leads to inflation.

Answer 356

(A) (SSC CGL Pre 2003) Exp: Zero based budgeting concept was introduced by Peter Phyr during Jimmy certer's Georgia Governorship in USA. Zero based budgeting is a technique to reduce and justify on going schemes or work.

Answer 357

(D)Exp: Capital receipts are those reciepts which results into reduction of government assets or increase in some liability. It includes market loans, small savings, Goverment provident funds etc.

Answer 358

(C) (SSC (10+2) DEO & LDC 2012) Exp: Loan is not included in current revenue of the union government. Revenue is amount that government actually recieves during the year and it include Tax revence, Non-tax revenue.

Answer 359

(A) (SSC CGL Pre 2004 & 2006) Exp: Fiscal policy is in relation with government spending and income adjustment with moto of stabilizing economy, economic growth, and employment generation.

Answer 360

(C) (SSC CGL Pre 2004) Exp: The steel industry is the industry having largest investment in Indian economy than cement, then jute and tea respectively.

Answer 361

(A) (SSC CGL Pre 2005) Exp: When government expenditure exceeds the government revenue in current account it is called as current account deficit and to handle this deficit budgeting i.e. monetization of deficit is used.

Answer 362

(B) (SSC CGL Pre 2006) Exp: Capital gains is gain or profit accrued on capital. Capital helps in production of goods and services.

Answer 363

(D) (SSC CGL Pre 2005) Exp: Borrowings and other liabilities are largest source of money to the Government of India as per the 2016-17 Budget.

Answer 364

(A) (SSC CGL Pre 2006) Exp: For the first time budget was presented during Indian Viceroy Canning and presented by Jame wilson.

Answer 365

(C) [SSC CHSL 2017] Exp: Finance budget is government plan of revenue and expenditure for a year and it is generally presented by finance minister of the country.

Answer 366

(D) [SSC CHSL 2017] Exp: Defence expenditure comes under revenue expenditure because this expenditure is for the smoother operation of the aremed forces.

Answer 367

(C) [SSC CHSL 2017] Exp: Profit = Total Revenue-Cost (i.e. implicit cost + explicit We will be getting answer Rs. 18 crore.

Answer 368

(A) [SSC CHSL 2017] Exp: Deficit monetization is financing the deficit created in budget and it increase money supply in economy.

Answer 369

(B) [SSC CHSL 2017] Exp: According to economic survey highest number of people working are agriculture.

Answer 370

(C) [SSC CPO 2017] Exp. When expenditure is more than receipts, it is called as deficit. So when revenue expenditure is more than revenue receipts, it is called as revenue deficit.

Answer 371

(C) [S.S.C MTS. Exam, 2013] Exp: Wealth tax is a type of direct tax, which was started from 1 April, 1957 but it is no longer in force with effect from year 2016-2017.

Answer 372

(A) [S.S.C MTS. Exam, 2008] Exp: The largest source of income for central goverment is direct taxes. Direct taxes include income tax, corporation tax, property tax etc.

Answer 373

(D) [S.S.C Steno. Exam, 2005] Exp: Sales tax is an indirect tax because the burden of tax can be shifted to the consumer.

Answer 374

(C) [S.S.C (FCI) Exam, 2012] Exp: Same as above.

Answer 375

(A) [S.S.C MTS. Exam, 2006] Exp: Entertainment tax is imposed by the state government. Other state government imposed tax includes stamp duty, toll tax, property tax etc.

Answer 376

(A) [S.S.C (CPO) 2015] Exp: In regressive tax the rate of tax decreases with increases in income of tax payers. It causes more burden on poor as compared to rich

Answer 377

(B) [S.S.C (CGL) Exam, 2014] Exp: Direct tax is a tax where the impact of tax and incidence of tax falls on the same person and the tax burden cannot be shifted.

Answer 378

(D) [SSC CGL Exam, 2013] Exp: Krishna Chandra pant was the Chairman of tenth finance commission. It was is established in 1992.

Answer 379

(A) [SSC Steno Exam, 2011, 14] Exp: Dr. Vijay Kelkar was the Chairman of 13th Finance commission. It was established in 2010.

Answer 380

(B) [SSC 10+2 Exam,2010] Exp: Canon of taxations are mentioned by Adam smith in his book the wealth of Nati They are four in numbers and as follows:- (A) Canon of equity 2. Canon of certainity 3. Canon of convenience and 4. Canon of economic efficiency. It does not include canon of simplicity

Answer 381

(C) [SSC 10+2 Exam,2012] Exp: VAT was first introduced in France on 10 April, 1954. VAT is an indirect tax which was introduced in India, on 1 April 2005.

Answer 382

(A) [SSC 10+2 Exam,2013] Exp: Value added is equal to the difference between output minus inputs. It simply means increase in the value of an article at every stage of production

Answer 383

(A) [SSC 10+2 Exam,2011] Exp: The Gadgil formula is used in division of tax revenue. The Gadgil formula is named after Dhananjay Ramchandra Gadgil, a social scientist and the first critic of Indian planning. It was evolved in 1969 for determining the allocation of central assistance for state plans in India.

Answer 384

(A) [SSC SO Exam, 2006] Exp: Finance Commission is a constitutional body established under Article 280 of Indian constitution. It determines the divison of net proceeds of taxes between States and Union.

Answer 385

(B) [SSC Steno. Exam, 2011] Exp: In Indirect taxes the burden of tax can be shifted to consumers. The tax bearer is not the tax payer. Poor and rich are equally affected by indirect taxes. Hence indirect taxes are generally considered as regressive tax.

Answer 386

(B) [SSC (10+2) Exam, 2011] Exp: Fiscal policy is a government policy which deals with manners in which goverment adjusts income or expenditure. The tools of fiscal policy includes taxation, expenditure and borrowings

Answer 387

(C) [SSC CGL Exam, 2011] Exp: Fringe benefit tax was introduced in the budget of 2005-06. It was imposed on benefits paid to an employee.

Answer 388

(C) [SSC DEO 2008, SSC CHSL 2017] Exp: The major sources of the revenue of central government includes income tax, corporation tax, wealth tax, custom duty, excise duty etc. It does not include agricaltural income tax. It is assigned to state government.

Answer 389

(D) [SSC CPO Exam, 2008] Exp: In 2002, Vijay Kelkar committee presented the report on tax reforms. Some other committees which were constituted on tax reforms includes Hellish committe in 1991, Shome panel in 2012.

Answer 390

(C) [SSC Tax Asst. Exam, 2007] Exp: Professional tax is a tax levied by state government on various professions like doctors, lawyers etc

Answer 391

(A) [SSC SO 2007] Exp: Excise duty is levied on production of goods within the country. It is an indirect tax.

Answer 392

(B) [SSC SO Exam, 2006] Exp: In progressive tax rate method tax increses with increases in income of tax payers. It reduces the burden on poor as their income is low campare to rich.

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