Previous Year’s Questions - Economics MCQ 5


30 Questions MCQ Test Economy Traditional for UPSC (Civil Services) Prelims | Previous Year’s Questions - Economics MCQ 5


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This mock test of Previous Year’s Questions - Economics MCQ 5 for UPSC helps you for every UPSC entrance exam. This contains 30 Multiple Choice Questions for UPSC Previous Year’s Questions - Economics MCQ 5 (mcq) to study with solutions a complete question bank. The solved questions answers in this Previous Year’s Questions - Economics MCQ 5 quiz give you a good mix of easy questions and tough questions. UPSC students definitely take this Previous Year’s Questions - Economics MCQ 5 exercise for a better result in the exam. You can find other Previous Year’s Questions - Economics MCQ 5 extra questions, long questions & short questions for UPSC on EduRev as well by searching above.
QUESTION: 1

Which from the following is not true when the interest rate in the economy goes up?         

Solution:

When interest rates are rising, both businesses and consumers will cut back on spending. This will cause earnings to fall and stock prices to drop. On the other hand, when interest rates have fallen significantly, consumers and businesses will increase spending, causing stock prices to rise.

QUESTION: 2

    Which of the following has the sole right of issuing currency (except one rupee coins and notes) in India?                    

Solution:
QUESTION: 3

The Narasimham Committee (1991) on financial reforms proposed for establishment of a                    

Solution:

The correct option is A.
It recommended the introduction of a four tier banking system in the country: I tier: 3 or 4 International Banks; II tier: 8 to 10 National Banks; III tier Regional Banks; and IV tier: Rural Banks.

QUESTION: 4

Which of the following Indian banks became the first to touch a market capitalisation of Rs. 100000 crore in India?            

Solution:
QUESTION: 5

The best way a bank can avoid loss is to                    

Solution:

C is the correct option.The best way for a bank to avoid loss is to accept only sound collateral. In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan.

QUESTION: 6

Devaluation of currency leads to         

Solution:
QUESTION: 7

Green banking means             

Solution:
QUESTION: 8

Long-term funds in the capital market can be raised either by borrowing from certain institutions or through

Solution:

C is the correct option.Long-term funds in the capital market can be raised either by borrowing from certain institutions or through  issue of securities.
Involve the public issue of equity and preference shares in the stock exchange. Issuing shares is the most common method of raising long-term capital because there are various many investors who are ready to invest in the capital market. Therefore, shares are used to finance projects having a long gestation period.
 

QUESTION: 9

Which one of the following is not a quantitative credit control techniques?            

Solution:

The correct answer is D as Bank rate, Statutory Cash Reserve Requirement, Statutory Liquidity Ratio are the instruments of quantitative credit control.
Except the interest rate on saving deposit.
 

QUESTION: 10

Foreign currency which has a tendency of quick migration is called            

Solution:
QUESTION: 11

    The total number of nationalised banks in India is                     

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QUESTION: 12

    Purchasing power parity theory is related with                    

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QUESTION: 13

What does ECS in banking xjf transactions stand for?                     

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QUESTION: 14

Inflation occurs when aggregate supply is                    

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QUESTION: 15

The ‘Interest Rate Policy’ is a component of                    

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QUESTION: 16

    Bank deposits that can be withdrawn without notice are called            

Solution:

A demand deposit account (DDA) consists of funds held in a bank account from which deposited funds can be withdrawn at any time, such as checking accounts. DDA accounts can pay interest on a deposit into the accounts but aren’t required. A DDA allows funds to be accessed anytime, while a term deposit account restricts access for a predetermined time.

QUESTION: 17

Scheduled Banks have to be registered with                     

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QUESTION: 18

New capital issue is placed in         

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QUESTION: 19

Which of the following is not viewed as national debt?                    

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QUESTION: 20

If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should         

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QUESTION: 21

    In India, one-rupee coins and notes and subsidiary coins are issued by            

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QUESTION: 22

Which of the following is apex bank for industrial loans?             

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QUESTION: 23

The basic regulatory authority for mutual funds and stock markets lies with the        

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QUESTION: 24

The Government resorts to devaluation of its currency in order to promote            

Solution:
QUESTION: 25

Deficit financing is an instrument of    

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QUESTION: 26

Which of the following can be used for checking inflation temporarily?            

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QUESTION: 27

Devaluation makes import        

Solution:

D is the correct option.Lowering of the value of a currency of a country tends to raise its exports by making its goods cheaper for foreigners. On the other hand, devaluation or depreciation makes the imports from abroad expensive in terms of domestic currency (rupees in case of India) and therefore the imports tend to fall.

QUESTION: 28

Commercial Bank law creates credit only if it has                    

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QUESTION: 29

Rate of interest is determined by        

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QUESTION: 30

Bull and Bear are related to which commercial activity?                     

Solution:

In the investing world, the terms "bull" and "bear" are frequently used to describe market conditions. These terms are used to describe how stock markets are doing in general—that is, whether they are appreciating or depreciating in value. And as an investor, the direction of the market is a major force that has a huge impact on your portfolio. So, it's important to understand how each of these market conditions may impact your investments.