BANKING SYSTEM AND CAPITAL MARKET IN INDIA

1.

The first Bank established in India was

(a) II Schedule of Banking Regulation Act

(a) Punjab National Bank

(b) II Schedule of Constitution

(b) Traders Bank

(c) II Schedule of Reserve Bank of India Act

(d) None of the above

(c) State Bank of India

(d) Bank of Hindustan
2.

3.

(a) The Reserve Bank of India Act, 1934

(a) 1780

(b) 1790

(c) 1770

(d) 1802

(c) The Reserve Bank of India (Amendment

and Misc. Provisions) Act, 1953

(b) The Banking Regulation Act, 1949

(d) The Banking Companies (Acquisition and

Transfer of Undertakings) Act, 1980

Co-operative Banks in India are operated

under which of the following acts?
10.

(a) 1935

(b) 1940

(c) Company Act, 1956

(c) 1949

(d) 1955

11.

(b) Banks, which have a paid up capital and

reserves of an aggregate value of not less
than ` 5 lakhs.

(b) Export-Import Bank of India 1982

(c) Small Industries Development Bank of
India (SIDBI) 1990

(c) Banks which are known as the cooperative

banks by the RBI

(d) Industrial Finance Corporation of India

1948
In which year IDBI transformed from a
development financial institution into a bank?
(a) 1964

(b) 1994

(c) 2004

(d) 2007

7.

12.

13.

The general superintendence and direction of

the RBI is entrusted to the Central Board of
Directors which consists of:
(a) 16 members

(b) 4 directors

(c) 20 members

(d) 4 local boards

(b) Oudh Commercial Bank

Which of the following is correct as to the

chronological order of nationalization?

(c) Punjab National Bank

(a) RBI, SBI, 14 Banks, 6 Banks

(d) Punjab and Sind Bank

(b) SBI, RBI, 6 Banks, 14 Banks

Which amidst the following rural banks has

been named after a river?
[NDA 2002]

(c) 14 Banks, SBI, RBI, 6 Banks

(a) Prathama Bank

8.

(d) All nationalized banks including private

banks

In India, the first bank of limited liability

managed by Indians and founded in 1881 was:
(a) Hindustan Commercial Bank

A Scheduled Bank refers to:

(a) Banks, which are not included in the
second schedule of RBI Act 1934.

Which of the following is incorrectly matched?

(a) IDBI Bank Limited 1954

6.

The RBI was nationalised in:

(b) Banking Regulation Act, 1949

(d) Cooperative Societies Act in 1912

5.

Banks in India are regulated by:

The first bank the Bank of Hindustan was

established in:

(a) Cooperative Societies Act in 1904

4.

9.

(d) RBI, 6 Banks, SBI, 14 Banks

14.

(b) Varada Grameen Bank

Which of the following is/are major functions

of the Reserve Bank of India?

(c) Thar Anchalik Grameen Bank

1.

Note Issue

(d) Aravali Kshetriya Grameen Bank

2.

Banker to Government

A Scheduled Bank is one which is included in

the:
[CPO SI 2002]

3.

Bankers Bank

4.

Custodian of Exchange Reserves

586

15.

Advanced Objective General Knowledge

(a) 1, 2 and 3

(b) 2, 3 and 4

(c) 1 and 3

(d) 1, 2, 3 and 4

(c) estate duty

(d) taxes on agricultural income

(a) Acceptance of deposits from public

In order to be scheduled to the Reserve Bank

of India, a bank should have capital and
reserve of not less than:

(b) Controller of Credit

(a) 1 lakh

(b) 5 lakhs

(c) 10 lakhs

(d) 50 Iakhs

Which of the following is NOT a function of the

Reserve Bank of India?

22.

(c) Note Issue

23.

(d) Bankers Bank

16.

Who among the following is the first Governor

of the Reserve Bank of India from 1 April 1935
to 30 June 1937?
24.

(a) Sir James Taylor

The number of Banks nationalised since 1969

is :
[PCS 1994]
(a) 8

(b) 12

(c) 14

(d) 20

The largest Public Sector Bank in India is:

[CDS 1991]

(b) Sir Osbrone Smith

17.

(c) K. G. Ambegaonkar

(a) Central Bank

(d) Sir C. D. Deshmukh

(b) State Bank of India

Who among the following was the Governor

of RBI when India got independence?

(c) Punjab National Bank

(a) Sir James Taylor

(d) Indian Overseas Bank

25.

(b) Sir Benegal Rama Rau

The Reserve Bank of India was established

in:

(c) Sir C D Deshmukh

(a) April 1935

(b) June 1935

(c) August 1934

(d) May 1936

(d) K G Ambegaonkar
18.

The first bank of limited liability managed by

Indians was:

26.

(a) The Commercial Bank of India

(a) July 1965

(b) June 1960

(b) Allahabad Bank

(c) July 1969

(d) January 1949

27.

(c) Oudh Commercial Bank

(d) Punjab National Bank Ltd.
19.

(b) Selling Mutual Funds

(c) Deciding policy rates like CRR, Repo
Rates / SLR etc.

(a) SEBI

(d) Settlement of payments on behalf of the

customers

(b) Reserve Bank of India

(c) Insurance Regulatory and Development
Authority

28.

The best way, a bank can avoid loss is to :

On the basis of suggestions of which of the

following committee, the Banking Regulation
Act was amended in 1993 to open the gates
for the new private sector banks?

(a) lend only to individuals known to the bank

(a) Narasimham Committee

(b) accept sound collateral

(b) Rangarajan Committee

(c) give only short-term loans

(c) Rajaraman Committee

(d) lend only to banks old customers

(d) Goiporia Committee

(d) General Insurance Corporation

21.

Which of the following is not a function of a

commercial bank?
(a) Providing project finance

For regulation of the Insurance Trade in the

country the Government has formed:
[UP PCS 2002]

20.

14 major Indian commercial banks of the

country were nationalized in:

The system of value added taxation is

applicable to:

29.

Which of the following is the Banker of the

Banks?
[Railways 1995]

(a) excise duties

(a) IDBI

(b) SBI

(b) income tax

(c) RBI

(d) SBI and RBI

Indian Economy MCQs

30.

31.

32.

33.

34.

35.

36.

The financial year of RBI begins on:

(a) 1 April
(b) 1 June
(c) 30 June
(d) 1 July
Which of the following is not true about the
Reserve Bank of India?
(a) It regulates the currency and credit system
of India
(b) It maintains the exchange value of the
rupee
(c) Foreign exchange reserves are kept by
RBI
(d) One rupee notes and coins are issued by
RBI
When was the Reserve Bank of India taken
over by the Government?
[PCS 1994]
(a) 1945
(b) 1948
(c) 19S2
(d) 1956
Who is responsible for the collection and
publication of monetary and financial
information?
(a) Finance Commission
(b) Finance Ministry
(c) Reserve Bank of India
(d) Auditor and Comptroller General of India
The Reserve Bank of India issues:
(a) all the currency notes
(b) all the currency notes except the one
rupee note
(c) all the currency notes except the hundred
rupee note
(d) only notes of ` 10 and above
Nationalisation of banks was done with the
purpose of:
(a) financing the industries
(b) improving credit facilities
(c) consolidating the economy
(d) improving security of deposits
Which two of the following nationalized banks
have been merged as per the recommendation
of the Narsimhan Committee? [NDA 1995]
(a) New Bank of India and Bank of India
(b) Central Bank of India and Corporation
Bank
(c) Parur Bank of India and Bank of India
(d) Punjab National Bank and New Bank of
India

37.

38.

39.

40.

41.

42.

43.

587

The acronym SRO, being used in the capital

market for various market participants, stands
for which one of the following? [CDS 2008]
(a) Self-Regulatory Organisations
(b) Small Revenue Operators
(c) Securities Roll-back Operators
(d) Securities Regulatory Organisations
Who among the following acts as the watchdog
of capital market in India?
(a) Reserve Bank of India
(b) Industrial Development Bank of India
(c) Securities Exchange Bank of India
(d) Ministry of Finance
Which of the following schemes is launched
specifically for helping senior citizens to avail
loan by mortgage of their residential property?
(a) English Mortgage Scheme
(b) Senior Capital Loan Scheme
(c) Reverse-Mortgage Loan Scheme
(d) DEMAT Account Scheme
Consider the following events:
1. Conversion of Imperial Bank of India into
S.B.I.
2. Establishment of NABARD
3. Setting up of RRBs
4. Nationalisation of R.B.I.
The correct chronological sequence of these
events is :
[CDS 1999]
(a) 4, 1, 2, 3
(b) 4, 1, 3, 2
(c) 1, 4, 3, 2
(d) 1, 4, 2, 3
National Savings Certificate matures at the end
of:
(a) Six years
(b) Seven years
(c) Ten years
(d) Twelve years
Word Bull and Big are associated with which
branch of commercial activity? [UP PCS 2002]
(a) Foreign Trade (b) Banking
(c) Share Market
(d) Manufacturing
How do we define the terms bull and bear with
regard to stock markets?
(a) A bull is an optimistic operator who first
buys and then sells shares in expectation
of the price going up; a bear is a
pessimistic market operator who sells the
shares in expectation of buying them back
at a lower price

Advanced Objective General Knowledge

588

(a) Central Bank

(c) Reserve Bank of India

(d) Both (b) and (c)
Normally banks accept Fixed Deposit for a
maximum period of:
(a) 5 years
(b) 7 years
(c) 12 years
(d) Any number of years
Bank rate is the rate at which:
(a) a bank lends to the public
(b) the Reserve Bank of India lends to the
public
(c) the Government of India lends to other
countries
(d) the Reserve Bank of India gives credit to
commercial banks
Which of the following committee launched the
process of reforms of financial system in India?
(a) Nariman Committee
(b) Narsimham Committee
(c) Gadgil Committee
(d) Puri Committee
The National Stock Exchange functions from:
(a) New Delhi
(b) Mumbai
(c) Nagpur
(d) Kolkata
Abid Hussain Committee is related to reforms
in ________ industries.
(a) private sector
(b) large
(c) public sector
(d) small
Among the following, which one is not a credit
rating agency operating in India?
(a) CRISIL
(b) ICRA
(c) CARE
(d) Dow Jones
The banks are required to maintain a certain
ratio between their cash in hand and total
assets. This is called:
[IAS 1998]
(a) SBRC (Statutory Bank Ratio)
(b) SLR (Statutory Liquid Ratio)
(c) CBR (Central Bank Reserve)
(d) CLR (Central Liquid Reserve)
According to the RBI directions, a NBFC (NonBanking Finance Company) must possess a
Net-owned Fund of the amount:
(a) minimum ` 5 lakh

(b) State Bank of India

(b) minimum ` 10 lakh

(b) There is nothing significantly different as

both operate in the capital market
(c) Bull is one who first sells a share and then
buys it at a lower price; bear means one
who first buys and then sells it in
expectation of prices going up

49.

(d) A bull is ready to buy any share; a bear

only deals in government securities
44.

What do you understand by Bear raid?

(a) An attempt to bring down the price of
strong short selling

50.

(b) Simultaneous buying of shares and

debentures in view of getting more values
in near future
(c) Higher rate of price paid for the particular
government share or debentures
(d) Any of the above
45.

Consider the following statements: [IAS 2004]

1.

Reserve Bank of India was nationalized

on 26 January, 1950

2.

The borrowing programme of the

Government of India is handled by the
Department of Expenditure, Ministry of
Finance

Which of the statements given above is/are

correct?

46.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

51.

52.

53.

What are gilt-edged securities?

(a) Securities issued by the multinationals
(b) Securities issued by the government
(c) Securities issued by the private sectors

54.

(d) Securities issued by the joint venture

companies
47.

48.

The functions of the Reserve Bank of India are:

1.

issuing all notes and coins

2.

distributing all notes and coins

3.

formulating monetary policy

4.

acting as agent of Government in respect

of Indias membership of the IMF

(a) 1, 3 and 4

(b) 2 and 3

(c) 2, 3 and 4

(d) 1, 2, 3 and 4

The central banking functions in India are

performed by the:
[CPO AC 2003]

55.

56.

Indian Economy MCQs

(c) minimum ` 25 lakh
(d) minimum ` 50 lakh
57.

Non-Banking Financial Company (NBFC) does

not have which of the following functions?

64.

(a) Equipment leasing

(b) Housing finance and investments in
financial securities
(c) Hiring & purchasing assets
(d) Demand deposits
58.

59.

Green Banking Channel has been launched

by:
(a) UTI

(b) SBI

(c) RBI

(d) ICICI

Participatory Notes (PNs) are associated with

which one of the following?

65.

(a) Consolidated Fund of India

(b) Foreign Institutional Investors
(c) United Nations Development Programme
(d) Kyoto Protocol
60.

Consider the following Acts.

A.

Enactment of Banking Regulation Act

B.

Nationalisation of State Bank of India

C.

Nationalization of SBI subsidiaries

D.

Nationalisation of 14 major Banks.

Choose the right option for the correct

chronological order of the above acts.

61.

(a) A - B - D - C

(b) B - A - C - D

(c) A - B - C - D

(d) C - B - A - D

Repo rate is the rate at which:

66.

67.

[CDS 2004]

(a) the Reserve Bank of India lends to State

Government
(b) the international aid agencies lend to
Reserve Bank of India

68.

(c) the Reserve Bank of India lends to banks

(d) the banks lend to Reserve Bank of India
62.

63.

Repo rate is decided by which of the following

organizations?
(a) SEBI

(b) AMFI

(c) RBI

(d) All Banks

Recession is:
(a) Rise in the cost of production, especially
because of wage increase
(b) Reduction in production and employment
for want of sufficient demand for goods

69.

589

(c) Increase in money supply without a

matching increase in production
(d) All of the above
The Securities and Exchange Board of India
has been set up to :
1. protect the interests of investors
2. to regulate the activities of brokers in the
stock market
3. to ensure transparency in operation in the
stock market.
4. to encourage a healthy growth of the stock
market
Choose your answer from:
(a) 1 and 2
(b) 1, 2 and 4
(c) 1, 2 and 3
(d) 1, 2, 3 and 4
What is full form of PPP as used in financial
world?
(a) Purchasing Power Parity
(b) Per capita Potential Purchases
(c) Public Per capita Power
(d) Present Purchasing Power
Insurance business in India is regulated by:
(a) Life Insurance Corporation of India (LIC)
(b) Securities Exchange Board of India (SEBI)
(c) Reserve Bank of India (RBI)
(d) Insurance Regulatory & Development
Authority (IRDA)
The Insurance Regulatory Development
Authority (IRDA) was established on which of
the following committees recommendations?
(a) Rangarajan Committee
(b) Malhotra Committee
(c) Chelliah Committee
(d) Narashimam Committee
Which among the following is the oldest
Development Financial Institution of India?
(a) UTI
(b) IDBI
(c) ICICI
(d) IFCI
ICICI stands for:
(a) Infrastructure Credit and Investment
Corporation of India
(b) Industrial Credit and Investment Company
of India
(c) Innovative Credit and Investment
Corporation of India
(d) Industrial Credit and Investment
Corporation of India

590
70.

71.

72.

73.

74.

75.

76.

Advanced Objective General Knowledge

ICICI was established in:
(a) 1949
(b) 1952
(c) 1955
(d) 1971
Consider the following statements: [IAS 2004]
1. The National Housing Bank, the apex
institution in housing finance in India, was
set up as a wholly owned subsidiary of
the Reserve Bank of India
2. The Small Industries Development Bank
of India was established as a wholly
owned subsidiary of the Industrial
Development Bank of India
Which of the statements given above is/are
correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Regional rural banks:
1. have limited area of operation
2. have free access to liberal refinance
facilities from NABARD
3. are required to lend only to weaker
sections
(a) 1 and 3
(b) 2 and 3
(c) 1, 2 and 3
(d) 1 and 2
What does the term NSDL stand for?
(a) National Securities Development Limited
(b) National Securities Depository Limited
(c) National Safety Development Limited
(d) National Social & Development Liabilities
NABARD (National Bank of Agriculture and
Rural Development) was established on:
(a) May 20, 1956
(b) June 28, 1976
(c) July 12, 1982
(d) October 12, 1987
The arguments to support opening up of the
Insurance sector in India were:
1. It will provide wider choice to customers
2. It will infuse competition and efficiency
3. It will widen the base of long term funds
4. It will improve balance of payments
position
Choose the correct answer from:
(a) 1, 2
(b) 2, 3
(c) 1, 2, 3
(d) 1, 2, 3 and 4
Agricultural Banking College is located in:
(a) Pune
(b) Calcutta
(c) Lucknow
(d) Kolkata

77.

78.

79.

80.

81.

82.

Match the following:

Institutions
Formation yr.
A. National Stock Exchange 1. 1990
B. OTCEI
2. 1992
C. SEBI
3. 1993
D. CARE
4. 1988
A B C D
A B C D
(a) 1 2 3 4
(b) 2 1 3 4
(c) 2 1 4 3
(d) 3 1 4 2
The liabilities of a commercial bank are:
1. time deposits
2. security holdings
3. demand deposits
4. advances from the central bank
(a) 1, 2 and 3
(b) 1, 3 and 4
(c) 2 and 4
(d) 1 and 3
NABARD celebrated its Silver Jubilee in the
year:
(a) 2005
(b) 2006
(c) 2007
(d) 2009
PLR stands for:
(a) Public Loan Rate
(b) Prime Lending Rate
(c) Primary Lending Rate
(d) Portfolio Lending Ratio
What is the role of Over-the Counter
Exchange (OTC)?
(a) Help in the introduction of multi-tiered
markets and import liquidity to them
(b) Help to overcome the balance of payment
crisis
(c) To arrange funds from different foreign
banks of developing/ under developing
countries
(d) All of the above
Consider the following financial institutions of
India:
1. Industrial Finance Corporation of India
(IFCI)
2. Industrial Credit and Investment
Corporation of India (ICICI)
3. Industrial Development Bank of India
(IDBI)
4. National Bank for Agriculture and Rural
Development (NABARD)

Indian Economy MCQs

The correct chronological sequence of the
establishment of these institutions is:

90.

[IAS 2002]

83.

(b) 2, 3, 4, 1

(1) Outmoded technology

(c) 3, 4, 1, 2

(d) 4, 1, 2, 3

(2) Poor customer service

(3) Inability of financial institutions in meeting
the challenges of the market

What is ECBs?

(4) Incurring of losses by some public sector

financial institutions

(b) Existing Commercial Banks

(c) External Commercial Banks
(d) Exclusive Commercial Borrowings
ALM stands for:

(5) All the above

91.

(a) Asset Liasoning Management

(b) Asset Level Management
(d) Assertive Legal Management

86.

87.

88.

EXIM Bank was set-up in :

(a) 1980

(b) 1982

(c) 1985

(d) 1986

(b) An unconditional undertaking given by a

bank ensuring the payment of a particular
amount to the drawee at a given date

Which of the following activities would Small

Industries Development Bank of India (SIDBI)
undertake under the new rural industrialisation
programme?
[Bank PO 1994]
1.

Consultation in erecting the project

2.

Providing marketing assistance and

refinance facilities at later stage

3.

Running the project during initial stage

(a) Only 1and 2

(b) Only 2 and 3

(c) Only 2

(d) Only 1

(c) Letter by a bank to a person stating the

terms and conditions of the loan
sanctioned to him by the bank
(d) Statement showing outstanding- deposits
and credits of a bank for a particular period
92.

(b) 1989

(c) 1991

(d) 1998

(b) C. Rangarajan and C. D. Deshmukh

(c) Y. V. Reddy and Manmohan Singh
(d) Subbarao and Bimal Jalan
93.

(b) Regional Rural Banks

(c) Export-Import Banks

(b) Stock market

(d) State Land Development Banks

(c) Development financial institutions

94.

(d) All the above

Which of the following is at the apex of
Industrial Finance in India?
[UDC 1995]
(a) Industrial Finance Corporation

95.

(b) Reserve Bank of India

(c) Industrial Development Bank of India
(d) Industrial Credit and
Corporation of India

In India, the bank NABARD does not provide

refinance to :
[CDS 2002]
(a) Scheduled Commercial Banks

The structure of capital markets includes:

(a) Guilt-edged market

89.

Who among the following served as both the

Governor of RBI and Finance Minister of India?
(a) C. D. Deshmukh and Manmohan Singh

National Housing Bank (NHB) was established

in:
(a) 1988

Which of the following best defines the term

Letter of Credit as used frequently in bank
transactions?
[SBI PO 1991]
(a) An order from a bank to another bank
abroad authorising the payment of a
particular amount to a person named in
the letter

(c) Asset Liability Management

85.

Which of the following factors necessitated

reforms in the financial and banking sectors in
India in the early 1990s?
[Bank PO 2012]

(a) 1, 2, 3, 4

(a) External Commercial Borrowings

84.

591

Investment

Which of the following is NOT a development

bank in Indian context?
(a) IDBI

(b) SIDBI

(c) NABARD

(d) SBI

Which of the following is called a bankers

cheque?
[CDS 2002]
(a) Demand draft

(b) Debit card

(c) Pay order

(d) Fixed deposit

592
96.

Advanced Objective General Knowledge

Bouncing of cheques may lead to _______.
(a) 6 months imprisonment
(b) 1 year imprisonment
(c) 2 years imprisonment
(d) 3 years imprisonment

97.

The difference between a bank and a nonbanking financial institution (NBFI) is that:

101.

[IAS 1994]
(a) a bank interacts directly with customers
while an NBFI interacts with banks and
governments
(b) a bank indulges in a number of activities
relating to finance with a range of
customers, while an NBFI is , mainly
concerned with the term loan needs of
large enterprises
(c) a bank deals with both internal and
international customers while an NBFI is
mainly concerned with the finances of
foreign companies
(d) a banks main interest is to help in
business transactions and saving/
investment activities while an NBFls main
interest is in the stabilisation of the
currency
98.

102.

103.

104.

The main function of the Exim Bank is:

(a) to help RBI in the regulation of foreign
exchange
(b) to prevent unlicensed transaction
(c) to promote exports and curtail imports

105.

(d) to conserve foreign exchange

99.

The main difference between shares and

debentures is :
(a) debentures can only be issued after
shares
(b) shareholders receive dividend on shares
whereas debenture holders receive
interest on debentures
(c) debentures can be partly converted into
shares whereas shares cannot be
converted into debentures
(d) shareholders are the owners of the
company whereas debenture holders are
the creditors of the company

100. Rajmannar Committee has been constituted

to give recommendations on which of the
following issues?

106.

107.

(a) Inspection of Banks in North-Easter states

(b) Changing in Banking Laws and regarding
cheque bounce
(c) Individual Bank applications regarding
branch license
(d) Issuing of Demand Draft
Open market operations of a Central Bank are
sale and purchase of:
(a) foreign currencies
(b) corporate securities
(c) trade bills
(d) government securities
To prevent recurrence of scams in Indian
Capital Market, the Government has assigned
regulatory powers to:
[IAS 1995]
(a) RBI
(b) SBI
(c) SEBI
(d) ICICI
The first Act to pass to pave the establishment
of Co-operative banks
(a) Co-operative Credit Societies Act, 1921
(b) Co-operative Credit Societies Act, 1925
(c) Co-operative Credit Societies Act, 1969
(d) Co-operative Credit Societies Act, 1912
Which committee was appointed in 1944 to
give recommendations to improve co-operative
movement?
(a) Hilton-young
(b) MacLagan
(c) Radhakrishnan (d) Rodgers
The Reserve Bank of India was set up under
the recommendation of which of the following
commissions?
(a) Phillip Commission
(b) Simon Commission
(c) Hilton Young Commission
(d) Hunter Commission
The place where bankers meet and settle their
mutual claims and accounts is known as :
[Bank PO 1993]
(a) treasury
(b) clearing House
(c) collection Centre (d) dumping Ground
The Imperial Bank of India, after nationalisation
was given the name of:
(a) Reserve Bank of India
(b) Bank of India
(c) Indian Overseas Bank
(d) State Bank of India

Indian Economy MCQs

108. The Imperial Bank of India was nationalized
and re-christened as State Bank of India in the
year:
(a) 1949
(b) 1950
(c) 1955
(d) 1960
109. Regional Rural Banks are designed to work in
which of the following ideals?
[IAS 1988]
(a) Work on basics of commercial banks
(b) Help the targetted groups
(c) Keep lending rates lower than cooperative
institutions
(d) Work on innovative and adaptive ideals
110. If the cash-reserve ratio is lowered by the
Central bank, what will be its effect on credit
creation?
(a) Decrease
(b) Increase
(c) No change
(d) None of these
111. Which of the following is not an asset held by
commercial banks?
(a) Bills of exchange
(b) Current account deposits
(c) Credit balances with the Reserve Bank
(d) Money lent at short notice
112. The primary objective of Unit Trust of India is:
(a) to assist the industries in financial
difficulties
(b) to diffuse the benefit of development
among the masses
(c) to accumulate funds for public investment
expenditure
(d) to promote the investment habit among
those who have not been able to diversify
investment risk
113. Which of the following is now a punishable
offence by a Bank Account holder?
[Bank PO 1990]
(a) If a cheque is not crossed
(b) If a post-dated cheque is issued
(c) If a cheque drawn by him is dishonoured
for insufficiency of funds in his account
(d) Issuing a cheque without signature
114. Which of the following are the functions of the
Central Bank of India?
[Railways 1992]
1. Regulation of currency and flow of credit
system
2.

Maintaining exchange value of rupee

593

3.

Formulating monetary policy of India

4.

Supervisory powers over the indigenous

bankers and leasing companies

(a) 1 and 3

(b) 1, 2 and 3

(c) 1, 2 and 4

(d) 1, 2, 3 and 4

115. Which bank in India gets the first ISO

certification?
(a) Syndicate Bank (b) Canara Bank
(c) Indian Bank

(d) State Bank of India

116. Which of the following are under the purview

of Industrial Development Bank of India?
1.

Unit Trust of India

2.

Life Insurance Corporation of India

3.

Export-Import Bank

4.

State Finance Corporation of India

(a) 1, 2 and 3

(b) 2, 3 and 4

(c) 1, 3 and4

(d) 1, 2 and 4

117. Which of the following organisations provide

credit history of the borrowers?
(a) RBI

(b) SEBI

(c) CIBIL

(d) CRISIL

118. Which of the following constitute short-term

sources of finance for small scale industries?
1.

Private money lenders

2.

Loans by commercial banks

3.

Credit Guarantee schemes

4.

National Small Industries Corporation

(a) 1, 2 and 3

(b) 1 only

(c) 1, 2 and 4

(d) 1, 2, 3 and 4

119. Which of the following provides the largest part

of the demand for loanable funds in India?
(a) Farmers
(b) Private-house purchasers
(c) Corporate businesses
(d) Hire-purchase borrowers
120. A crossed cheque is one, which can be
encashed only:
[IFS 1991]
(a) by the drawee
(b) through a bank,
(c) at the State Bank of India
(d) after it has been transferred to another
person
121. Which one of the following Indian banks is not
a nationalized bank?
[IAS 2006]

Advanced Objective General Knowledge

594

(a) Corporation Bank

(b) Dena Bank

(c) Federal bank

(d) Vijaya Bank

122. Banking ombudsman has been constituted

under which act?
(a) RBI Act
(b) SBI Act
(c) Companies Act
(d) Banking Regulation Act
123. Which of the following is not an affiliate of the
Reserve Bank of India?
(a) Unit Trust of India
(b) The Industrial Development Bank of India
(c) Agricultural Refinance Corporation
(d) Deposit Insurance Corporation
124. The basic regulatory authority for mutual funds
and stock markets lies with the:
(a) Government of India
(b) Reserve Bank of India
(c) Securities and Exchange Board of India
(d) Stock Exchanges
125. Regional Rural Banks were set up on the
recommendations of:
(a) Narasimham Committee
(b) Goiporia Committee
(c) Mahalanobis Committee
(d) Sarakaria Committee
126. Which of the following is/are the major
function(s) of RRBs?
(a) Providing banking facilities to rural and
semi-urban areas
(b) Carrying out government programmes
(c) Providing Para-Banking facilities like
locker facilities, debit and credit cards
(d) All of the above
127. Arrange chronologically the establishment of
the following:
1.

General Insurance Corporation of India

2.

Unit Trust of India

3.

Small Industries Development Bank of

India

4.

Industrial Credit and

Corporation of India

Investment

(a) 4, 1, 2, 3

(b) 4, 2, 1, 3

(c) 2, 1, 4, 3

(d) 2, 1, 3, 4

128. What is the animal on the insignia of the RBI?

(a) Bull
(b) Lion
(c) Tiger
(d) Panther
129. What is a Bulls market?
(a) A market fully speculated about the fall in
price
(b) A market fully speculated about rise in
price
(c) A market that will be constant
(d) A market that neither gives upward nor
downward
130. A rise in SENSEX means:
(a) a rise in the prices of shares of all
companies registered with Bombay Stock
Exchange
(b) a rise in the prices of shares of all
companies registered with National Stock
Exchange
(c) an overall rise in the prices of shares of a
group of companies registered with
Bombay Stock Exchange
(d) a rise in the prices of shares of all
companies belonging to a group of
companies registered with Bombay Stock
Exchange
131. FRBM stands for:
(a) Fiscal Responsibility and Banking
Management
(b) Financial Responsibility and Budget
Management
(c) Federal Responsibility and Business
Management
(d) Fiscal Responsibility and Budget
Management
132. In which bank of the following, Indian
Government still has hundred percent share
in banks equity?
(a) Allahabad Bank
(b) Bank of Maharashtra
(c) Central Bank of India
(d) All the above
133. What is Dow Jones?
(a) Share market index of New York exchange
market
(b) Gold price Index of World Gold Council
(c) Share market index of Mumbai stock
exchange
(d) None of these

Indian Economy MCQs

134. Quantitative credit controls do not include:
(a) open market operations
(b) bank rate

595

(d) Hang Seng Indexes record daily changes

of the largest companies of the Hong Kong
stock market
141. Consider the following statements:

(c) cash reserve ratio

1.

Life Insurance Corporation of India is the

oldest insurance company in India.

2.

National Insurance Company limited was

nationalized in the year 1972 and made a
subsidiary of General Insurance
Corporation of India.

(a) Banking Codes and Standard Bureau of

India

3.

Headquarters of United India Insurance

Company limited are located at Chennai.

(b) Banking Codes and Service Board of Inida

Which of the statements given above are

correct?
[lAS 2006]

(d) RBI directives

135. Debenture holders of a company are its:
(a) shareholders

(b) creditors

(c) debtors

(d) directors

136. BCSBI stands for:

(c) Banking Codes and Standard Board of

India
(d) Banking Committee and Standard Board
of India
137. Which of the following organisations in India
is mainly working to meet the credit needs of
all types of agricultural and rural development
activities?
(a) FCI

(b) IDBI

(c) NABARD

(d) ICAR

(a) 1, 2 and 3

(b) 1 and 2, only

(c) 2 and 3, only

(d) 1 and 3, only

142. What is Nifty?

(a) Minimum support price of commodities
(b) Share price index of National Stock
Exchange
(c) Fertilizer tax
(d) None of the above

138. Which of the following combinations is correct?

[IFS 1989]
(a) NABARD - Industrial Loans
(b) IDBI - Short term loans
(c) RBI - Long term finance
(d) RRB - Agricultural finance
139. Which one of the following Public Sector banks
emblem figures a dog and the words faithful,
friendly in it?
[CDS 2010]
(a) Punjab National Bank
(b) Syndicate Bank

143. Which of the following bank was NOT

nationalized in 1980?
(a) Andhra Bank

(b) Dena Bank

(c) Vijaya Bank

(d) None of the above

144. In 1921, the Presidency Banks of Bengal,

Madras and Bombay were nationalised to give
birth to:
(a) Punjab National Bank
(b) Syndicate Bank
(c) State Bank of India
(d) Punjab and Sindh Bank
145. The oldest stock exchange of India is :

(c) Oriental Bank of Commerce

(a) Bombay Stock Exchange

(d) State Bank of India

(b) Ahmedabad Stock Exchange

140. Which one of the following statements is not

correct?
[CDS 2009]
(a) The National Association of Securities
Dealers Automated Quotations known as
NASDAQ, is an American stock exchange
(b) Nikkei is the stock market index for the
Tokyo Stock Exchange
(c) S and P CNX Nifty is the index for 50 large
companies on the Bombay Stock
Exchange

(c) Bangalore Stock Exchange

(d) Hyderabad Stock Exchange
146. ln which year Bombay stock exchange came
into existence?
(a) 1872

(b) 1875

(c) 1878

(d) 1879

147. Consider the following statements:

1.

ICICI Bank is the largest private sector

bank in India.

Advanced Objective General Knowledge

596
2.

Postal life Insurance is the oldest life

insurance organization in India.

Which of the statements give above is/are

correct?
[IAS 2005]

153. Basel
Committee
has
given
its
recommendations on which of the following
aspects of banking operations?
[RBI Grade B Officer 2011]

(a) 1 only

(1) Marketing of bank products

(b) 2 only

(2) Priority sector lending

(c) Both 1 and 2

(3) Risk Management

(d) Neither 1 nor 2

(4) Micro financing

148. When the New Bank of India was merged with

Punjab National Bank?
(a) 1990

(b) 1993

(c) 1999

(d) 2001

149. The National Housing Bank was set up in India

as a wholly-owned subsidiary of which one of
the following?
[IAS 2007]
(a) State Bank of India
(b) Reserve Bank of India
(c) ICICI Bank

(5) All of the above

154. Which of the following committee was of the
view that banks should have greater freedom
in determining their lending rates?
(a) Narasimham Committee
(b) Chakravarty Committee
(c) Goiporia Committee
(d) Kelkar Committee
155. Who amongst the following has never held post
of the Governor of the RBI?
[RBI Grade B Officer 2011]

(d) Life Insurance Corporation of India

150. In some parts of India, farmers face acute
distress because of heavy burden of debt from
non-institutional renders. Who can be called
a non-institutional lender?
[RBI Grade B Officer 2011]
(1) Small Banks
(2) Grameen Banks
(3) Credit Cooperative Societies
(4) Micro Finance Institutions
(5) Money Lenders
151. Which of the following organisations prepare
rural credit plans on annual basis for all districts
in India, which in turn form the base for annual
credit plans of all rural financial institutions?
[RBI Grade B Officer 2011]
(1) SIDBI
(2) NABARD

(1) C. Rangarajan
(2) L.K. Jha
(3) Manmohan Singh
(4) Bimal Jalan
(5) Usha Thorat
156. Sub Prime Lending is a term applied to the
loans made to _______.
[Punjab & Sindh Bank 2011]
(1) those borrowers who do not have a good
credit history.
(2) those who wish to take loan against the
mortgage of tangible assets.
(3) those who have a good credit history and
are known to bank since 10 years.
(4) those borrowers who are most preferred
customers of the Bank.
(5) None of the above

(3) RBI
(4) Indian Banks Association
(5) CII
152. The RBI has regional offices at various places.
At which of the following places it does not have
an office?
[RBI Grade B Officer 2011]

157. As per the reports published- in various

journals and newspapers the small borrowers
in rural areas still prefer to take informal route
for their credit needs. Which of the following is
the informal route of credit in financial sector?
[Punjab & Sindh Bank 2011]

(1) Kota

(2) Nagpur

(1) Credit cards

(3) Lucknow

(4) Panaji

(2) Loan against gold from financial institute

(5) Guwahati

(3) Debit cards

Indian Economy MCQs

(4) Money lender
(5) None of the above
158. Which of the following banks is/are
nationalized bank(s) in India?
(a) Axis Bank

(b) ICICI Bank

(c) Federal Bank

(d) None of the above

164.

159. Who amongst the following was never a

Governor of the RBI ?
[SBI Associates Clerk 2011]
(1) Bimal Jalan
(2) Y. V. Reddy
(3) Arup Roy Choudhury
(4) C. Rangarajan

165.

(5) D. Subbarao
160. In the world of commodity exchanges-the
concept of A standard contract to buy or sell
a specified commodity at a certain date in
future and at a market driven price is known
as
[UBI PO 2010]

166.

(1) Future contract (2) Forward contract

(3) Market contract (4) Standard contract
(5) None of these
161. Stock Exchanges play, role in an economy
which may be termed as
[UBI PO 2010]
(1) hardly useful
(2) useful but need strict regulation
(3) harmful to proper capital markets
(4) a gambling-where many investors get
ruined

167.

(5) a very important segment to regulate

inflation
162. Which one of the following is not a feature of
Limited Liability Partnership firm? [IAS 2010]
(a) Partners should be less than 20
(b) Partnership and management need not be
separate

168.

(c) Internal governance may be decided by

mutual agreement among partners
(d) It is a corporate body with perpetual
succession
163. Which of the following is NOT an agency
service undertaken by commercial banks?
(a) Income-tax Consultancy
(b) Issuance of Travellers Cheques and
Credit Cards

169.

597

(c) Acts as Correspondent

(d) Execution of Standing Orders
Which of the following statements is/are
correct?
1. NIFTY is based upon 50 firms in India.
2. NIFTY is governed and regulated by the
Reserve Bank of India.
3. NIFTY does not trade in mutual funds
Select the correct answer using the code given
below:
[CDS 2012]
(a) 1 only
(b) 2 only
(c) 3 only
(d) 1 and 3
Private Sector Mutual Funds in India were
permitted in
[UP PCS 2011]
(a) 1964
(b) 1993
(c) 1994
(d) 2001
Which of the following statements regarding
Regional Rural Banks (RRB) in India is/are
correct ?
1. The basic aim of setting up the RRBs is
to develop rural economy.
2. The area of RRBs is limited to a specific
region comprising one or more districts.
3. RRBs are sponsored by Commercial
Banks.
Select the correct answer using the code given
below:
[Asstt Commdt 2011]
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Consequent upon the recommendations of the
Working Group on Rural Banks, 5 Rural
Regional Banks were initially set up in the year
[CPO SI 2010]
(a) 1973
(b) 1974
(c) 1975
(d) 1976
In India, which of the following have the highest
share in the disbursement of credit to
agriculture and allied activities? [CSAT 2011]
(a) Commercial Banks
(b) Cooperative Banks
(c) Regional Rural Banks
(d) Microfinance Institutions
Which of the following is NOT a feature of
Savings bank account?
(a) It is opened by individuals for the purpose
of saving a part of their income.

Advanced Objective General Knowledge

598

(b) Service Charges are payable in case of

Saving Account.

(b) International Development Association

(IDA)

(c) It is operated by salary earners, small

traders and others.

(c) International Monetary Fund (IMF)

(d) It earns a nominal rate of interest. At

present, it is about 5% p.a. (in India).
170. Special Drawing Rights (SDRs) facility is
available at:
(a) World Bank (WB)

(d) Organisation of Economic Cooperation

and Development (OECD)
171. Which unit of valuation is known as paper
gold?
(a) Eurodollar

(b) Petrodollar

(c) SDR

(d) GDR

ANSWERS
1. (d)

2. (c)

3. (d)

4. (a)

5. (c)

6. (b)

7. (b)

8. (a)

9. (b)

10. (c)

11. (b)

12. (c)

13. (a)

14. (d)

15. (a)

16. (b)

17. (c)

18. (c)

19. (c)

20. (a)

21. (a)

22. (b)

23. (d)

24. (b)

25. (a)

26. (c)

27. (c)

28. (a)

29. (c)

30. (d)

31. (d)

32. (b)

33. (c)

34. (b)

35. (c)

36. (d)

37. (a)

38. (c)

39. (c)

40. (b)

41. (a)

42. (c)

43. (a)

44. (a)

45. (d)

46. (b)

47. (c)

48. (c)

49. (d)

50. (d)

51. (b)

52. (b)

53. (c)

54. (d)

55. (b)

56. (c)

57. (d)

58. (b)

59. (b)

60. (c)

61. (d)

62. (c)

63. (b)

64. (d)

65. (a)

66. (d)

67. (b)

68. (d)

69. (d)

70. (c)

71. (c)

72. (c)

73. (b)

74. (c)

75. (c)

76. (a)

77. (c)

78. (b)

79. (c)

80. (b)

81. (a)

82. (a)

83. (a)

84. (c)

85. (b)

86. (a)

87. (a)

88. (d)

89. (c)

90. (5)

91. (c)

92. (a)

93. (c)

94. (d)

95. (a)

96. (c)

97. (b)

98. (c)

99. (d)

100. (b)

101. (c) 102. (c)

103. (d)

104. (b)

105. (c)

106. (b)

107. (d)

108. (c)

109. (b)

110. (b)

111. (b)

112. (d)

113. (c)

114. (d)

115. (b)

116. (b)

117. (c)

118. (a)

119. (c)

120. (b)

121. (c) 122. (d)

123. (a)

124. (c)

125. (a)

126. (d)

127. (b)

128. (c)

129. (b)

130. (c)

131. (d) 132. (d)

133. (a)

134. (d)

135. (b)

136. (c)

137. (c)

138. (d)

139. (b)

140. (c)

141. (c) 142. (b)

143. (b)

144. (c)

145. (a)

146. (b)

147. (d)

148. (b)

149. (b)

150. (5)

151. (2) 152. (1)

153. (5)

154. (b)

155. (5)

156. (1)

157. (4)

158. (d)

159. (3)

160. (1)

161. (2) 162. (a)

163. (b)

164. (a)

165. (b)

166. (b)

167. (c)

168. (a)

169. (b)

170. (c)

171. (c)

Indian Economy MCQs

599

FISCAL SYSTEM AND BUDGETING IN INDIA

1.

2.

3.

Which is the best measure of economic growth

of a country?

IV. Maintenance expenditure of embassies

(a) I, II, III, IV

(b) I, II, III

(a) GNP

(b) GDP

(c) I, II

(d) II, IV

(c) Net revenue

(d) None of these

A tax Which is paid by the person on whom

the tax is incident is called a :

8.

Which among the following Industrial Policy

resolution/ statement was based upon the
Mahalanobis Model of growth?

(a) direct tax

(b) local tax

(a) Industrial Policy resolution 1956

(c) indirect tax

(d) rate

(b) Industry Policy statement 1973

Rate of growth of an economy is measured in

terms of:
(a) per capita income
(b) national income

(c) Industrial Policy statement 1977

(d) Banking Policy 1969
9.

(c) infrastructural development

(d) persons above poverty line
4.

The standard of living in a country is

represented by its:
(a) national income

(a) finance bill

(c) per capita income

(d) unemployment rate
5.

6.

To institutionalize Gender Budgeting in India,

the setting up of Gender Budgeting Cells
(GBCs) in all Ministries/Departments was
mandated by the Ministry of Finance in which
of the following year?

By which bill does the government make

arrangement for the collection of revenues for
a year?
(a) Supplementary Budget
(b) Finance Bill
(c) Fiscal Budget
(d) Economic Bill

(a) 2002

(b) 2005

Sugam is a
__________.

(c) 2007

11.

scheme

(d) 2010

(a) Small tax payers

launched

Since 1951, in India:

(b) Pensioners getting old age pension

(a) national income has increased but per

capita income has decreased

(c) Big corporate houses

(b) national and per capita incomes have both

increased fast

12.

(d) national income has increased and per

capita income has also increased but at a
slower rate

Salary and allowances of the President

and CAG

II.

Debt charges of the Government

III. Defence expenditure

Grants or advances made by the House to

enable the government to carry on until the
voting of the demands for grants and passing
of the General Appropriation Bill is called:
(a) vote on account
(b) complementary budget

Which of the following expenses do not require

the sanction of Parliament?
I.

for

(d) Getting all sorts of permission/clearances

for small exporters

(c) national income and per capita income

have increased every year

7.

(b) money bill

(c) credit budget bill (d) appropriation bill

10.

(b) poverty ratio

Once the demands for grants and expenditure

of different departments are passed by the
Parliament, a bill to draw money from
Consolidated Fund India for these purposes
is introduced. This bill is called:

(c) supplementary budget

(d) contingency budget
13.

On account of some national emergency or in

order to carry out some secret mission, the
government sometimes requires funds but may
not give the details of the expenditure

600

Advanced Objective General Knowledge

estimates. The House grants some lumpsum for this

called :
(a) emergency budget

19.

(b) vote of Credit

(c) contingency bill
(d) supplementary budget
14.

Consider the following statements:

(A) In India since independence the share of
the primary sector has been declining
while the shares. of the secondary and
tertiary sectors have been increasing

20.

(B) This trend shows that Indian economy is

passing through the transition from an
agricultural to an industrial economy
While one of the following is correct?
(a) Only A

21.

(b) Only B
(c) Both A and B
(d) A is wrong, B is correct
15.

Which of the following is the basis for

determining the national income?
(a) Total revenue of the State
(b) Production of goods and services
(c) Net profit earned and expenditure incurred
by the State
(d) All of the above

16.

Which of the following is not a method of

estimating national income?

22.

[I. Tax & Central Excise 1991]

(a) Income method
(b) Value-added method
(c) Expenditure method
(d) Export-import method
17.

Which of the following committees/

commissions was set up to suggest measures
for effective implementation of Public
Distribution System (PDS)?
(a) Kelkar Committee
(b) Verma Commissiom
(c) DP Wadhwa Committee
(d) Narashimam Committee

18.

The national income of India is estimated

mainly through:
[CBI 1993]
(a) production method alone
(b) expenditure method alone

23.

(c) production and expenditure methods

(d) production and income methods
Which of the following are referred to as the
developed economies?
(a) Countries earning huge industrial profits
(b) Countries proficient in trade and export
(c) Countries having large per capita income
(d) Countries advanced in technology
An advalorem duty is a tax on the basis of:
[IAS 1988]
(a) the price of a commodity
(b) the value added
(c) the advertisement expenditure
(d) the unit of the commodity
Consider the following statements with regard
to Statutory liquidity Ratio (SLR) :
1. To meet SLR, commercial banks can use
cash only.
2. SLR is maintained by the banks with
themselves.
3. SLR restricts the banks leverage in
pumping more money into the economy.
Which of the statements given above is/are
correct?
[CDS 2010]
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) 2 only
Which of the following is not true about voteon-account?
[Bank PO 1991]
(a) It is a budget presented in the Parliament
to cover the deficit left by the last budget
(b) It does not allow the Government to set
for the economic policies of the new plan
which starts from April 1
(c) It prevents the Government from imposing
fresh taxes or withdrawing old one
(d) This allows the Government to withdraw
an amount for a period with the consent
of Parliament
Consider the following statements:
1. The repo rate is the rate at which other
banks borrow from the Reserve Bank of
India.
2. A value of 1 for Gini Coefficient in a country
implies that there is perfectly equal income
for everyone in its population.
Which of the statements giver, above is/are
correct?
[IAS 2007]

Indian Economy MCQs

24.

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

30.

The system of Budget was introduced in India

during the viceroyalty of:

25.

(b) Dalhousie

(c) Ripon

(d) Elgin

Which of the following body in USA is akin to

the Finance Ministry in India?

(b) Department of Expenditure

(c) Department of Revenue
(d) Department of Disinvestment
31.

(b) The Bureau of Budget

(b) Rate - a compulsory levy collected by the

government from the beneficiaries of
particular schemes

(c) The Office of Management & Budget

(d) The Central Secretariat
Which of the following was the most popular
budgetary approach during the post-world war
II time?

(c) Corporation tax - levied by corporations

for civic amenities
(d) Proportional tax - a tax levied at the same
time at all levels of the base

(a) Line Item Budget

(b) Lump Sum Budget

Which of the following is incorrectly matached?

(a) Cess - a compulsory levy collected by the
government for a particular purpose from
all persons

(a) Treasury of USA

26.

The department under the Ministry of Finance

which is responsible for the preparation of
budget:
(a) Department of Economic Affairs

[Central Excise 1994]

(a) Canning

32.

The basic attribute of a formal organization is

(c) Performance Budgeting

27.

(a) esteem and prestige

The Budget is a viable instrument of financial

administration because of all the following
reasons except:

(b) roles and duties

(c) dominance and supremacy
(d) rules and regulations
33.

[CPO SI 2003]
(a) rises

(c) It shows practical ways of improving the

financial performance of various
programmes.

(c) remains constant

(b) falls
(d) can be any of the above
34.

(b) Scrutiny and review of estimates by the

controlling officers;
(c) Scrutiny and review of revised estimates
by Finance offices attached to the
Administrative Departments

(a) fiscal deficit only

(b) revenue deficit only
(c) both fiscal and revenue deficit

(d) Obtaining comments of Comptroller and

Auditor General of India

(d) neither fiscal deficit nor revenue deficit

Temporary tax levied to obtain additional
revenue is called:

Which of the following is an incorrect step in

the preparation of budget in India?
(a) Preparation of preliminary estimates by
disbursing officers;

Which one of the following statements is

correct?
Fiscal Responsibility and Budget Management
Act (FRBMA) concerns
[IAS 2006]

29.

If the price of an inferior good falls, its demand:

(b) It brings coordination between the

demands and resources.

(d) It helps in fixation of priorities for different

programmes.
28.

[CPO AC 2003]

(d) Zero-Base Budgeting

(a) It brings together the demands of various

departments for their different
programmes.

601

35.

The existence of a Parallel Economy or Black

Money:
[CPO SI 2003]

(a) cess

(b) rate

(a) makes the economy more competitive

(c) fee

(d) surcharge

(b) makes the monetary policies less effective

602

36.

37.

38.

39.

40.

41.

42.

Advanced Objective General Knowledge

(c) ensures a better distribution of income and
wealth
(d) ensures increasing productive investment
Put the main sources of revenue of the Central
Government in ascending order of importance:
1. Income tax
2. Corporation tax
3. Customs
4. Excise duties
(a) 1, 2, 3, 4
(b) 3, 2, 4, 1
(c) 4, 3, 1, 2
(d) 4, 3, 2, 1
The highest sector wise contribution to gross
domestic saving comes from:
(a) private corporate sector
(b) household sector
(c) public sector
(d) cooperative sector
An amount given by a government agency or
even private body to encourage a particular
economic activity is a :
(a) grant
(b) loan
(c) subsidy
(d) mutual fund
The per capita income has been low in India
because:
(a) of population growth
(b) of price rise
(c) more people are in rural areas
(d) of regional imbalances
Which one of the following is not a department
of the Finance Ministry?
(a) Department of Economic Affairs
(b) Department of Expenditure
(c) Department of Revenue
(d) Department of Budget
Independent audit was established in India by
the British Government in:
(a) 1858
(b) 1919
(c) 1935
(d) 1937
The rate of growth of the tertiary sector has
been:
(a) higher than the overall rate of growth of
the net domestic product
(b) lower than the overall rate of growth of the
net domestic product
(c) same as the overall rate of growth of the
net domestic product
(d) fluctuating when compared to growth of
net domestic product

43.

44.

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 payment 2. subsidies

3.

defence

4. irrigation

(a) 1 and 2

(b) 1 only

(c) 1, 2 and 3

(d) 2, 3 and 4

Which among the following formulates fiscal

policy?
(a) RBI
(b) Finance Ministry
(c) SEBI
(d) Planning Commission

45.

What is the main objective of control of the

government expenditure?
(a) To ensure that money is used for the
purpose for which it is intended.
(b) To achieve fair distribution among different
services
(c) To try to secure full value of the money
distributed
(d) All the above

46.

Which among the following is the regulatory

authority for giving clearance for External
Commercial borrowing?
(a) Reserve Bank of India
(b) Foreign Investment Promotion Board
(c) Securities and Exchange Board of India
(d) Foreign Investment Promotion Council

47.

48.

The Zero Base Budgeting in India was first

experimented from:
(a) April, 1987

(b) April, 2000

(c) April, 1991

(d) None of these

The prices at which the government purchases

food grains for maintaining the public
distribution system and for building up buffer
stocks are known as :
(a) Minimum Support Prices
(b) Procurement Prices
(c) Issue Prices
(d) Ceiling Prices

49.

Under the constitutional arrangement in India

a single paisa cannot be spent without prior
approval of which of the following bodies?

Indian Economy MCQs

50.

51.

52.

53.

54.

55.

(a) Parliament
(b) Prime Ministers office
(c) Planning commission
(d) Reserve Bank of India
Who is the chairman of 14th Finance
Commission?
(a) C. Rangarajan (b) M.N. Vohra
(c) YV Reddy
(d) Vijay Kelkar
The South Asian Free Trade Agreement
(SAFTA) was introduced with a view of levying
how much customs duty for trading any product
within the SAARC zone?
[RBI Grade B Officer 2011]
(1) 5%
(2) 4%
(3) 2%
(4) 1%
(5) No customs duty
Balanced Growth means:
(a) growth which brings about a balance
between the rich and the poor
(b) growth which brings about a balance
between the public and private sectors
(c) growth which brings about a balance
between the traditional and modern sector
(d) growth pattern on which simultaneous
investments are made in all the sectors
of the economy, viz., Agriculture, Industry,
Transport, Communication, etc.
Increase in Oil Pool Deficit implies:
(a) increasing gap between international and
domestic oil prices
(b) domestic oil price is comparatively more
than international price
(c) governments Fiscal Deficit goes up
(d) none of these
Which of the following is the most appropriate
definition of Zero-base in Zero-base
budgeting?
(a) Budget starts with 0 point
(b) Making budgetary grants without a base
(c) All programmes of decision package of an
agency are reexamined afresh every year
(d) None of the above
In which year the budget was formally
introduced in India by the British Government?
(a) 1858
(b) 1860
(c) 1919

(d) 1935

56.

603

Which of the following types of the budget is

followed by the Government of India?
(a) Legislative Type of Budget
(b) Executive Type of Budget
(c) Board/Commission Type of Budget
(d) All the above

57.

Dear Money Policy implies:

(a) high price level
(b) large money supply
(c) high production
(d) high interest rates

58.

Which of the following is wrongly matched:

(a) share market - stock exchange
(b) interest rate - fiscal policy
(c) export subsidy - fiscal policy
(d) general price index - inflation

59.

60.

Railway Budget in India was separated from

general budget in :
(a) 1924-25

(b) 1941-42

(c) 1947-48

(d) 1950-51

Who was the Finance Minister to introduce the

budget for the first time in India during British
regime?
(a) Sir Warren Hasting
(b) A.O .Hume
(c) Sir James Wilson
(d) Lord Chelmsford

61.

62.

The term Budget has been derived from the

French word Bougette which means a:
(a) Document

(b) Estimation

(c) Treasury

(d) Wallet

In recent years the capital outlays for the

defence service have been:
(a) increasing steadily
(b) more or less constant
(c) going down steeply
(d) fluctuating frequently

63.

Which one of the following is the most

important item of non-plan expenditure?
(a) Interest payment
(b) Defence
(c) Fertiliser subsidies
(d) Loans to public enterprises