Monday, April 11, 2011


1. The principles of taxation were propounded by—
(A) Edwin Canon
(B) Adam Smith
(C) 3. M. Keynes
(D) Dalton
Ans: (B)

2. Protection means—
(A) Restrictions imposed on import trade
(B) Protection to home goods
(C) No free exchange of good and services between two countries
(D) All of these
Ans: (D)

3. Reserve Bank of India—
(A) Provides direct finance to agriculture
(B) Provides finance to primary co-operative societies
(C) Provides finance to state co-operative banks
(D) Does not provide finance to agriculture
Ans: (C)

4. In which sector of the Indian economy is productivity the highest?
(A) Manufacturing
(B) Transport, communication and commerce
(C) Agriculture
(D) Other sectors
Ans: (A)

5. When the price Of a substitute of commodity X falls, the demand for X—
(A) Rises
(B) Falls
(C) Remains unchanged
(D) None of these
Ans: (B)

6. Which of the following is not a part of national income?
(A) Wages and Salaries
(B) Profits
(C) Rent
(D) Interest on national debt.
Ans: (D)

7. Fixed cost is known as—
(A) Special cost
(B) Direct cost
(C) Prime cost
(D) Overhead cost
Ans: (D)

8. If tea and coffee are substitutes, a reduction in the price of coffee will—
(A) Increase the sale of tea
(B) Decrease the sale of coffee
(C) Increase the sale of coffee
(D) Decrease the price of tea
Ans: (C)

9. According to Lord Keynes, interest rate is determined by the supply and demand for—
(A) Savings
(B) Loanable funds
(C) Money
(D) Capital goods
Ans: (C)

10. Which of the following is the indirect tax?
(A) Wealth Tax
(B) Capital gains Tax
(C) Excise duty
(D) Corporation Tax
Ans: (C)

11. If. the price of Pepsi decreases relative to the price of coke and 7-up, the demand for—
(A) Coke will decrease
(B) 7-up will decrease
(C) Coke and 7-up will increase
(D) Coke and 7-up will decrease
Ans. (D)

12. Who initiated open economy system in Indian economy?
(A) Pranab Mukherjee
(B) Dr. Manmohan Singh
(C) I. G. Patel
(D) Madhu Dandvate
Ans. (B)

13. Reserve Banks of India was established on—
(A) 1 January, 1934
(B) 1 April, 1934
(C) 1 January, 1935
(D) 1 April, 1935
Ans. (D)

14. The first Indian Bank in totality was—
(A) State Bank of India
(B) Presidency Bank of Calcutta
(C) Traders Bank
(D) Punjab National Bank
Ans. (D)

15. Basic difference between Reserve Bank and other banks is that it—
(A) Issues foreign exchange
(B) Acts as banker to the government
(C) Issues agricultural loans
(D) Finances sick industries
Ans. (B)

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