Economy Set 1 MCQs

Economy GK

Economy Set 1 MCQs

Practice Economy GK MCQs on basic economic concepts including economy, economics, microeconomics, macroeconomics, goods and services, demand and supply, factors of production, opportunity cost, economic activities, sectors of economy and other fundamental concepts frequently asked in SSC, Railway, Banking, UPSC, JKSSB, JKPSC, Police, Defence and other competitive examinations.

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Total Questions

Practice Questions

Page 49 of 111
Question #961
Certificate of deposit is issued by:
A. banks and financial institutions
B. mutual funds
C. RBI only
D. stock exchanges
Discuss
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Correct Answer: Option A

Explanation:
Certificates of deposit are issued by banks and financial institutions.
This question belongs to: Economy GK Economy Set 1
Question #962
The yield on a bond and its price have an inverse relationship. If market interest rates rise, the price of an existing bond:
A. falls
B. remains unchanged
C. becomes zero
D. rises
Discuss
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Correct Answer: Option A

Explanation:
When market interest rates rise, existing bond prices fall because their fixed coupon becomes less attractive.
This question belongs to: Economy GK Economy Set 1
Question #963
Inflation-indexed bonds provide investors protection against:
A. income tax
B. market risk
C. inflation by linking principal or interest to a price index
D. exchange rate fluctuations
Discuss
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Correct Answer: Option C

Explanation:
Inflation-indexed bonds link principal or interest payments to inflation, protecting investors from inflation.
This question belongs to: Economy GK Economy Set 1
Question #964
The Fifteenth Finance Commission was headed by:
A. C. Rangarajan
B. Y.V. Reddy
C. N.K. Singh
D. Vijay Kelkar
Discuss
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Correct Answer: Option C

Explanation:
The Fifteenth Finance Commission was headed by N.K. Singh.
This question belongs to: Economy GK Economy Set 1
Question #965
Under GST, interstate supply of goods is subject to:
A. CGST only
B. IGST
C. SGST only
D. UTGST only
Discuss
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Correct Answer: Option B

Explanation:
Interstate supply of goods and services is subject to Integrated GST.
This question belongs to: Economy GK Economy Set 1
Question #966
The e-way bill under GST is required for the movement of goods with a value exceeding:
A. Rs 50,000
B. Rs 10,000
C. Rs 1,00,000
D. Rs 2,00,000
Discuss
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Correct Answer: Option A

Explanation:
An e-way bill is required for movement of goods valued above Rs 50,000.
This question belongs to: Economy GK Economy Set 1
Question #967
The corporate tax rate for existing domestic companies that opted for concessional regime under Taxation Laws Amendment Act 2019 is:
A. 22%
B. 30%
C. 25%
D. 15%
Discuss
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Correct Answer: Option A

Explanation:
The concessional corporate tax rate for existing domestic companies is 22% plus surcharge and cess.
This question belongs to: Economy GK Economy Set 1
Question #968
Minimum Alternate Tax is levied on companies that:
A. are foreign companies
B. have no profit
C. pay very low tax due to exemptions and deductions
D. are in special economic zones
Discuss
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Correct Answer: Option C

Explanation:
MAT is imposed on companies whose normal tax liability is low because of exemptions and deductions.
This question belongs to: Economy GK Economy Set 1
Question #969
Advance tax is income tax that is:
A. paid only by companies
B. refunded by the government
C. paid after the end of the financial year
D. paid in advance in instalments during the financial year
Discuss
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Correct Answer: Option D

Explanation:
Advance tax is paid in advance in instalments during the financial year instead of a lump sum at the end.
This question belongs to: Economy GK Economy Set 1
Question #970
Tax Deduction at Source means:
A. tax is paid by the employer after salary payment
B. tax is waived
C. the payer deducts tax at the time of payment and deposits it with the government
D. the taxpayer pays tax after assessment
Discuss
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Correct Answer: Option C

Explanation:
TDS requires the payer to deduct tax at source and deposit it with the government.
This question belongs to: Economy GK Economy Set 1
Question #971
A Special Economic Zone is a geographical region with:
A. no private sector activity
B. complete prohibition of imports
C. higher tariffs than the rest of the country
D. liberal economic laws to promote exports and investment
Discuss
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Correct Answer: Option D

Explanation:
SEZs have more liberal economic laws to promote exports and investment.
This question belongs to: Economy GK Economy Set 1
Question #972
Foreign Trade Policy in India is announced by the:
A. Ministry of Finance
B. Ministry of Commerce and Industry
C. RBI
D. Ministry of External Affairs
Discuss
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Correct Answer: Option B

Explanation:
Foreign Trade Policy is formulated by the Ministry of Commerce and Industry.
This question belongs to: Economy GK Economy Set 1
Question #973
Balance of Trade refers to the difference between:
A. exports and imports of goods and services
B. exports and imports of goods only
C. foreign exchange reserves and gold
D. capital inflows and outflows
Discuss
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Correct Answer: Option B

Explanation:
Balance of Trade is the difference between a country's exports and imports of goods only.
This question belongs to: Economy GK Economy Set 1
Question #974
The Foreign Exchange Management Act was enacted in which year?
A. 2005
B. 1973
C. 1999
D. 1992
Discuss
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Correct Answer: Option C

Explanation:
FEMA was enacted in 1999, replacing FERA.
This question belongs to: Economy GK Economy Set 1
Question #975
FERA, replaced by FEMA, was enacted in:
A. 1980
B. 1973
C. 1947
D. 1991
Discuss
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Correct Answer: Option B

Explanation:
FERA was enacted in 1973 and replaced by FEMA in 1999.
This question belongs to: Economy GK Economy Set 1
Question #976
Currency appreciation generally makes exports:
A. cheaper
B. free from tariffs
C. more expensive in foreign currency
D. unchanged
Discuss
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Correct Answer: Option C

Explanation:
When a currency appreciates, domestic goods become more expensive for foreign buyers, reducing exports.
This question belongs to: Economy GK Economy Set 1
Question #977
Currency depreciation generally makes imports:
A. more expensive in domestic currency
B. cheaper
C. subsidized
D. unchanged
Discuss
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Correct Answer: Option A

Explanation:
Depreciation makes foreign goods more expensive in domestic currency, reducing import demand.
This question belongs to: Economy GK Economy Set 1
Question #978
The J-curve effect suggests that after a currency depreciation, the trade balance:
A. initially worsens before improving
B. improves immediately
C. never improves
D. is unaffected
Discuss
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Correct Answer: Option A

Explanation:
The J-curve effect shows that trade balance may worsen initially after depreciation before improving.
This question belongs to: Economy GK Economy Set 1
Question #979
Purchasing Power Parity theory states that exchange rates between currencies adjust to equalize:
A. the purchasing power of currencies in terms of goods
B. inflation rates only
C. government budget deficits
D. interest rates
Discuss
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Correct Answer: Option A

Explanation:
Purchasing Power Parity says exchange rates adjust so that identical goods cost the same in different currencies.
This question belongs to: Economy GK Economy Set 1
Question #980
The Kisan Credit Card scheme provides farmers with:
A. free land
B. subsidized fertilizers only
C. short-term and long-term credit facilities for agricultural needs
D. crop insurance only
Discuss
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Correct Answer: Option C

Explanation:
The Kisan Credit Card provides farmers with timely credit for cultivation and other agricultural needs.
This question belongs to: Economy GK Economy Set 1
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