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INSIGHTS REVISION TEST for Preliminary Exam 2018: Test – 2

INSIGHTS REVISION TEST for Preliminary Exam 2018: Test – 2

Solutions will be posted Tomorrow morning at 11.

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1) Which of the following statements is/are correct regarding Monetary Transmission?

  1. It refers to the process by which a central bank’s monetary policy decisions are passed on to the financial markets
  2. Rising Non-Performing Assets (NPAs) and higher returns on small savings schemes may hinder effective monetary transmission.
  3. Lowering of CRR and SLR requirements may help ensure effective monetary transmission

Select the correct answer using the code given below

(a) 1 only

(b) 2 and 3 only

(c) 1 and 2 only

(d) 1, 2 and 3

2)Which of the following services are accounted in the Gross Domestic Product of a country?

  1. Services rendered by a domestic help
  2. Services rendered by a worker from unorganized sector
  3. Services produced in Indian embassies located abroad
  4. Services produced in military establishments located abroad

 

Select the correct answer using the codes given below

(a) 1 and 2 only

(b) 1, 2 and 3 only

(c) 2, 3 and 4 only

(d) 1, 2, 3 and 4

 

3). With reference to Effective Revenue Deficit; consider the following statements:

  1. It was introduced on the recommendation of 13th Finance Commission
  2. It includes all the revenue expenditure done in the form of grants for creation of capital assets
  3. Grants given under MNREGA to build capital assets like roads and ponds forms part of it

 

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3 only

(c) 3 only

(d) None
 

4). Consider the following statements:

Assertion (A): In the agricultural lending mechanism of India, moneylenders despite their usurious rates of interest are still predominant.

Reason (R): Most often the commercial banks could not meet the target of 18% of their total lending for the agricultural sector in the country.

Select the appropriate answer using the codes below:

(a) Both (A) and (R) are true and (R) is the correct explanation of (A).

(b) Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(c) (A) is true and (R) is false.

(d) (A) is false and (R) is true.

 

5). Which of the following is/are Government of India debt obligations?

  1. State Provident Funds
  2. Small Savings
  3.  Reserve Money
  4. Reserve Funds and Deposits

Select your answer using the codes below:

(a) 1 and 2 are correct.

(b) 1,, 2 and 4 are correct.

(c) 2 and 4 are correct.

(d) 1, 2 and 3 are correct.

 

6). List – I                  List – II

  1. Free trade area         1. No restrictions on trade and factor movement
  2. Customs union          2. Trade is free and no Customs Duties
  3. Common market       3. No Customs Duties but duties on nonmembers
  4. Economic union        4. Advanced stage of integration

Codes:

a          b          c          d

(A)       2          1          3          4

(B)       3          2          4          1

(C)       2          3          1          4

(D)       1          3          4          2

 

7). What is the relationship between savings, investments and growth as enumerated in the economic survey?

a) Saving slowdown might result in a growth slowdown and vice-versa

b) Growth slowdowns are preceded by investment slowdowns

c) Saving and investment are always equal and directly related to growth

d) Growth has limited bearing on savings and investment

 

8) The File cover chosen for 2018 economic survey report was pink because

a) To support human rights

b) To highlight gender issues against backdrop of development

c) To extend support to trafficking victims

d) To create mass awareness on Child Trafficking

 

9). Which of the following doesn’t belong to the 10 facts pointed by Economic Survey 2017:

a) Formal non-agricultural payroll much greater than believed

b) States prosperity positively correlated with their international and inter-state trade

c) Clothing incentive package boosts exports of readymade garments

d) Direct tax collections by state/local governments is significantly higher compared with those of their counterparts in other federal countries

 

 

10). What do we understand by the term food credit in India?

 

a) Loans given to farmers

b) Loans given to poor families in distress

c) Loans given to FCI for procurement operations

d) None of the above

 

 

11). Special Safeguard mechanisms were put into place to get rid of NPAs in which sector:

  1. Steel
  2. Power
  3. Construction
  4. Ship Building

 

Which of the above is/are correct:

 

a) Only 1

b) 1 and 2

c) 1,2 and 3

d) All of the above

 

12).  What was response of Public Sector Banks in wake of Twin Balance Sheet problem?

  1. They scaled back their new lending.
  2. They increased their interest margins for performing borrowers and depositors, thus effectively burdening MSME sector for no fault of their own.

Identify the correct statements

a) 1 only

b) 2 only

c) Both

d) Neither of the above

 

13). Which of following constitute future fiscal challenges for the states?

  1. Pay Commission recommendations
  2. slowing growth
  3. rising payments from the UDAY bonds
  4. Increased discretionary spending through flexi funding mechanisms

Identify the correct statements

a) 1 & 2 only

b) 1, 2 & 3 only

c) All are correct

d) None are correct

 

14). Which factors provided impetus to the impressive fiscal performance by the states?

  1. Passing of Fiscal responsibility legislations
  2. Acceleration of GDP growth
  3. Decline in interest payments
  4. increased transfers from the Centre and central CSS expenditure

Identify the incorrect statements

a) 1 & 2 only

b) 2 & 3 only

c) All

d) None

 

15). Consider the following statements regarding fiscal consolidation in India:

 

  1. India like several other countries, embarked in the mid-2000s on an ambitious project of fiscal consolidation.
  2. Fiscal Responsibility and Budget Management (FRBM) Act was adopted by the centre in 2003.

 

Identify the correct statements

a) 1 only

b) 2 only

c) Both

d) Neither of the above

 

16). Consider the following statements:

 

Assertion (A): After Fiscal Responsibility legislations were passed, states expanded more discretionary spending.

Reason (R) : It would be easier to scale back discretionary spending, if needed to achieve the deficit targets.

Identify the correct statements (Assertion – A & Reason – R)

a) Both A and R are true but R is the correct explanation of A

b) Both A and R are true but R is not a correct explanation of A

c) A is true but R is false

d) A is false but R is true

 

17). Assertion: During the mid-2000s debt of the companies increased.

Reason: The period witnessed high growth rates of economy with increasing investment-GDP ratio and overseas spending.

Identify the correct statements (Assertion – A & Reason – R)

a) Both A and R are true but R is the correct explanation of A

b) Both A and R are true but R is not a correct explanation of A

c) A is true but R is false

d) A is false but R is true

 

18) which of the following about RBI governor is incorrect:

a) He is part of the search cum selection committee for members of Monetary Policy Committee

b) He heads the MPC

c) He represents India in IMF

d) He is having casting vote in MPC

 

19). Graded surveillance system is in the news in the context of:

a) Abnormal rise in Non-performing assets of Public Sector Banks

b) Detection of various shell companies and money laundering

c) Unusual price movements in the stock Market

d) Detection of various frauds in the banking system

 

20). Consider the following statements:

  1. NBFCs can outsource various functions such as treasury, cash management etc
  2. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself
  3. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks

Which of the above statements are true:

a) 2 and 3

b) 1 and 3

c) Only 3

d) All of the above

 

21) After Doklam stand-off between India and China, other than Nathu La Pass the most favourable route for Indian piligrims to Kailash-Mansarovar is

a) Shipki La

b) Bomdila

c) Lipu Lekh Pass

d) Niti La

      

22) As per Indian Extradition Act, 1962.

  1. Offences punishable with a minimum one year of imprisonment qualities for an extradition request.
  2. A foreign national responsible for offence on Indian soil can be extradited.
  3. India has extradition treaty with U.A.E

  Which of the following is correct?

a) 1 and 3

b) 2 and 3

c) 3 only

d) All of the above

23) Consider the following statement regarding GM Mustard.

  1. It is first GM food crop approved by GEAC.
  2. DMH-11 is herbicide tolerant allowed for commercial cultivation in India.

 Which of the following is/are correct?

a) 1 Only

b) 2 Only

c) Both 1 and 2

d) None of the above

24) Consider the following statements regarding International court of Justice.

  1. Dalveer Bhandari is the first Indian permanent judge elected to ICJ.
  2. Judges are elected by members of UNGA and UNSC by absolute majority for a term of 6 years.

  Which of the following is/are correct?

a) 1 only.

b) 2 only

c) Both 1 and 2

d) None of the above

25) Consider the following statement regarding U.N-TIR convention (Transports Internationaux Routiers Convention)

  1. The accession to TIR convention is part of India’s multi-modal transport strategy for global economic integration.
  2. It also includes maritime transport which will be helpful in boosting trade with Central Asian Republics through Chabahar Port.

a) 1 only

b) 2 only

c) Both 1 and 2

d) None of the above.