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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Practice Questions

Page 65 of 111
Question #1281
The 'repo rate' in India is the rate at which RBI lends to banks for:
A. foreign exchange
B. long-term capital
C. unsecured overnight loans
D. short-term funds against government securities
Discuss
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Correct Answer: Option D

Explanation:
Repo rate is the rate at which RBI lends short-term funds to banks against government securities.
This question belongs to: Economy GK Economy Set 1
Question #1282
The 'Marginal Standing Facility' is available to banks at a rate how much above repo rate?
A. 0.25%
B. 2%
C. 1%
D. 0.50%
Discuss
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Correct Answer: Option A

Explanation:
MSF rate is normally 0.25 percentage points above the repo rate.
This question belongs to: Economy GK Economy Set 1
Question #1283
The 'Reverse repo rate' is the rate at which RBI:
A. lends to banks
B. rediscounts bills
C. borrows from banks against government securities
D. lends to the government
Discuss
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Correct Answer: Option C

Explanation:
Reverse repo is the rate at which RBI borrows from banks against government securities.
This question belongs to: Economy GK Economy Set 1
Question #1284
The 'standing deposit facility' was introduced by RBI as a tool for:
A. export finance
B. lending to banks
C. absorbing liquidity without collateral
D. long-term investment
Discuss
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Correct Answer: Option C

Explanation:
Standing Deposit Facility allows RBI to absorb liquidity from banks without providing collateral.
This question belongs to: Economy GK Economy Set 1
Question #1285
The 'liquidity adjustment facility' was introduced in India based on the recommendations of:
A. Rangarajan Committee
B. Kelkar Committee
C. Urjit Patel Committee
D. Narasimham Committee
Discuss
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Correct Answer: Option D

Explanation:
The Liquidity Adjustment Facility was introduced in 2000 based on Narasimham Committee recommendations.
This question belongs to: Economy GK Economy Set 1
Question #1286
The 'Urjit Patel Committee' recommended which inflation target for India?
A. 6% with a band of +/- 1%
B. 5% fixed
C. 2%
D. 4% with a band of +/- 2%
Discuss
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Correct Answer: Option D

Explanation:
The Urjit Patel Committee recommended an inflation target of 4% with a +/- 2% band.
This question belongs to: Economy GK Economy Set 1
Question #1287
The 'Monetary Policy Committee' meets at least how many times in a financial year?
A. 6
B. 2
C. 12
D. 4
Discuss
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Correct Answer: Option D

Explanation:
The MPC meets at least four times a year.
This question belongs to: Economy GK Economy Set 1
Question #1288
The 'RBI Act' was amended in 2016 to give statutory backing to:
A. inflation targeting and the Monetary Policy Committee
B. financial inclusion
C. payment banks
D. digital currency
Discuss
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Correct Answer: Option A

Explanation:
The RBI Act amendment in 2016 gave statutory backing to flexible inflation targeting and the MPC.
This question belongs to: Economy GK Economy Set 1
Question #1289
The 'RBI's Annual Report' is published by:
A. National Statistical Office
B. Reserve Bank of India
C. NITI Aayog
D. Ministry of Finance
Discuss
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Correct Answer: Option B

Explanation:
The RBI publishes its Annual Report.
This question belongs to: Economy GK Economy Set 1
Question #1290
The 'Financial Stability Report' in India is published by:
A. Reserve Bank of India
B. NITI Aayog
C. Ministry of Finance
D. SEBI
Discuss
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Correct Answer: Option A

Explanation:
The RBI publishes the Financial Stability Report.
This question belongs to: Economy GK Economy Set 1
Question #1291
The 'Financial Stability and Development Council' is chaired by:
A. SEBI Chairman
B. Prime Minister
C. RBI Governor
D. Union Finance Minister
Discuss
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Correct Answer: Option D

Explanation:
The Financial Stability and Development Council is chaired by the Union Finance Minister.
This question belongs to: Economy GK Economy Set 1
Question #1292
The 'Insolvency and Bankruptcy Board of India' regulates:
A. banks only
B. stock exchanges
C. insolvency professionals and agencies
D. insurance companies
Discuss
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Correct Answer: Option C

Explanation:
IBBI regulates insolvency professionals, agencies and information utilities.
This question belongs to: Economy GK Economy Set 1
Question #1293
The 'Public Financial Management System' is used for:
A. digital management of government expenditures and payments
B. foreign exchange trading
C. bank lending
D. stock trading
Discuss
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Correct Answer: Option A

Explanation:
PFMS is a digital platform for government expenditure and payment management.
This question belongs to: Economy GK Economy Set 1
Question #1294
The 'Ways and Means Advances' are given by RBI to:
A. commercial banks
B. NBFCs
C. foreign governments
D. central and state governments to bridge temporary mismatches in receipts and expenditures
Discuss
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Correct Answer: Option D

Explanation:
Ways and Means Advances are short-term advances by RBI to governments to bridge temporary mismatches.
This question belongs to: Economy GK Economy Set 1
Question #1295
The 'Fiscal Responsibility and Budget Management Act' initially aimed to reduce fiscal deficit to what percentage of GDP by 2008-09?
A. 2%
B. 5%
C. 3%
D. 6%
Discuss
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Correct Answer: Option C

Explanation:
The FRBM Act initially aimed to reduce fiscal deficit to 3% of GDP by 2008-09.
This question belongs to: Economy GK Economy Set 1
Question #1296
The 'FRBM Act' requires the government to present a 'Medium Term Fiscal Policy Statement' along with the budget to Parliament.
A. Only in election years
B. Only for states
C. False
D. True
Discuss
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Correct Answer: Option D

Explanation:
The FRBM Act requires the government to present a Medium Term Fiscal Policy Statement, Fiscal Policy Strategy Statement and Macroeconomic Framework Statement.
This question belongs to: Economy GK Economy Set 1
Question #1297
The 'Fiscal Responsibility and Budget Management Act' applies to:
A. State governments only
B. RBI only
C. Private companies
D. Central Government
Discuss
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Correct Answer: Option D

Explanation:
The FRBM Act primarily applies to the Central Government.
This question belongs to: Economy GK Economy Set 1
Question #1298
The 'effective revenue deficit' was introduced in the budget of which year?
A. 2009-10
B. 2014-15
C. 2011-12
D. 2008-09
Discuss
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Correct Answer: Option A

Explanation:
The concept of effective revenue deficit was introduced in the Union Budget 2009-10.
This question belongs to: Economy GK Economy Set 1
Question #1299
The 'gender budgeting' in India refers to:
A. budget for defence
B. analysis of budget allocations from a gender perspective
C. tax on women
D. budget for women only
Discuss
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Correct Answer: Option B

Explanation:
Gender budgeting involves analyzing government budgets for their impact on women and girls.
This question belongs to: Economy GK Economy Set 1
Question #1300
The 'outcome budget' presents:
A. only financial outlays
B. only revenue receipts
C. expected outcomes of government programmes
D. only capital receipts
Discuss
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Correct Answer: Option C

Explanation:
An outcome budget links financial outlays with expected outcomes of government schemes.
This question belongs to: Economy GK Economy Set 1
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A man buys a book for Rs. 150 and sells it for Rs. 180. What is the gain percent?