INDIAN ECONOMY TEST - 4-Indian Economy-Quiz

Civil Services Exams-INDIAN ECONOMY TEST - 4

Q 1.
Philips curve provides a menu between:

a.)
Inequality and economic growth and the trade-off decrease with development.
b.)
Trade deficit and devaluation and there is low trade off in the short turn.
c.)
Unemployment and inflation and there is low trade off in the short run.
d.)
Unemployment and inflation and there is low trade off in the long run.

Q 2.
The Pareto optimality with respect to a policy change is with respect to:

a.)
Social welfare
b.)
Fiscal balance
c.)
Trade balance
d.)
Price level

Q 3.
The Pareto principle says that:

a.)
No individual should be worse off while bringing welfare improvement to others.
b.)
If one person’s welfare improves more by reducing the welfare of others slightly, that is a good policy change.
c.)
Social welfare doesn’t depend on individual welfare.
d.)
Compensation should be given to those persons who losses welfare.

Q 4.
Which of the following is not part of the impossible trinity in monetary policy?

a.)
Domestic balance reflected through stable prices
b.)
Fiscal stability of the government finances
c.)
External sector balance reflected in the stability of the currency
d.)
Independent monetary policy by the central bank

Q 5.
The macroeconomic message of the Kuznet curve is:

a.)
Unemployment and Inflation have inverse relationship for a considerable period.
b.)
Inequality increases with economic growth during the initial phase of development of a country.
c.)
Inequality and economic growth are always negatively related when comes to structural change.
d.)
Tax revenue has procyclicality

Q 6.
Consider the following statements about Basel III norms:

1. There is higher risk for banks with business cycle variations and hence banks should keep counter cyclical capital

2. Minimum equity capital may fall short sometimes and hence banks should keep a capital buffer for this.

a.)
1 and 2 correct
b.)
Only 1 is correct
c.)
Only 2 is correct
d.)
Neither 1 nor 2 is correct

Q 7.
Consider the following macroeconomic variables:

1. Investment

2. Savings

3. Government expenditure

Which of these are components of aggregate demand?

Codes:

a.)
1, 2 and 3
b.)
1 and 3
c.)
2 and 3
d.)
1 Only

Q 8.
Who is a retail investor in an Initial Public Offer according to SEBI regulations?

a.)
Individuals who buys shares less than Rs 2 lakh
b.)
Individuals who buys less than 1000 shares
c.)
Individuals who buys shares less than Rs 5 lakh
d.)
Individuals who buys shares worth less than Rs 10 lakh

Q 9.
The Most Favoured Nation is a clause related with:

a.)
IMF
b.)
World Bank
c.)
UNCTAD
d.)
WTO

Q 10.
Lorenze curve is related with:

a.)
Business cycle
b.)
Inequality
c.)
Taxation
d.)
Monetary policy transmission

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