Competitive Exams: Economics MCQs (Practice-Test 66 of 122)

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1. Which one of the following methods is being adopted by the Reserve Band of India to neutralize the impact of increasing foreign exchange reserves on inflation in India?

   1. Contracting the supply of money through sale of securities.

   2. Purchasing foreign exchange from the authorize dealers and sterilizing the impact of increase in M3 through the sale of securities.

   3. Importing larger quantities of goods and services

   4. Depositing foreign exchange with the

   IMF

2. The figure shown above is associated with which of the following?

   1. Competitive Equilibrium

   2. Monopoly Equilibrium

   3. Monopolistic Competition Equilibrium

   4. Monopolistic Competition Equilibrium

   Select the correct answer from the codes given below:

   1. 1 and 2

   2. 2, 3 and 4

   3. 1 only

   4. 3 and 4

3. Which one of the following gives the correct relationships between marginal revenue (MR), price elasticity (e), and price (P)

   1. MR = 1 P e-

   2. MR e 1 P e- = =

   3. P e 1 MR e- =

   4. MR = P 1

   5. N/A

4. The Government of India reduced the peak rate of customs duty in the financial year 2002 − 2003

   1. 30%

   2. 25%

   3. 20%

   4. 15%

5. Match List I with List II and select the correct answer using the codes given below the Lists:

   List-I	List-II
   Points to the right of IS curve Points to the left of IS curve Points above the LM curve Points below the LM curve	excess demand for money Excess demand for goods Excess supply of goods Excess supply of money

   • A
   • B
   • C
   • D
   1. • 4
      • 2
      • 3
      • 1
   2. • 3
      • 1
      • 4
      • 2
   3. • 4
      • 1
      • 3
      • 2
   4. • 3
      • 2
      • 4
      • 1

6. Which one of the following pairs is not correctly matched?

   1. • Revenue Receipts
      • Tax Revenue + NonTax Revenue
   2. • Total Receipts
      • Revenue Receipts + capital Receipts
   3. • Revenue Expenditure
      • Revenue Deficit + Revenue Receipts
   4. • Primary Deficit
      • Revenue Deficit-Interest Payments.

7. The Human Development Index (HDI) measures the overall achievements in a country in three basic dimensions of human development which of the following is/are not among them?

   1. Longevity and health

   2. Education and Knowledge

   3. Women and child development

   4. Decent standard of living

   Select the correct answer using the codes given below:

   1. 5 only

   2. 3 and 4

   3. 2 and 3

   4. 1 and 4

8. Consider the following exchange rate regimes:

   1. par value system

   2. Flexible and the market determined exchange rate system

   3. Basket pegged regime

   4. Liberalised exchange rate managed system

   The correct sequence of these in India is

   1. 2 − 3 − 4 − 1

   2. 1 − 2 − 3 − 4

   3. 1 − 3 − 2 − 4

   4. 1 − 3 − 4 − 2

9. By which year, would the multi-fibre agreement be completely phased out under WTO agreement?

   1. 2006

   2. 2005

   3. 2004

   4. 2007

10. What happens to the LM curve in a situation where the money supply rises?

    1. The LM curve does not change at all

    2. The LM curve shifts to the left

    3. The LM curve shifts to the right

    4. The LM curve becomes parallel to the horizontal axis

11. As per medium term Export Strategy (MTES) for 2002 − 2007 India targets to achieve which one of the following share of global trade by 2007

    1. 35

    2. 2%

    3. 1%

    4. 4%

12. In the diagram, the exchange rate between US dollar and Indian Rupees is shown on the Y-axis, while the amount of foreign exchange is shown on X-axis. DD represents demand curve for foreign exchange. SS represents supply curve of foreign exchange. Equilibrium exchange rate is given by ‘Or’ at Rs. 45 for $1. A shift in the demand curve to the right to D1 D1 leads to which of the following?

    1. Establishment of a new equilibrium exchange rate.

    2. New amount of foreign exchange demanded and supplied

    3. Fall in the value of India Rupee

    Select the correct answe4r using the codes given below:

    1. 1 and 2

    2. 2 and 3

    3. 1 and 3

    4. 1, 2 and 3

13. For which of the following purposes are S. D. Rs. Used by a country?

    1. to achieve factor-price equalization

    2. To acquire foreign exchange to cover deficits

    3. To repurchase its own currency from other countries

    Select the correct answer using the codes given below:

    1. 1, 2 and 2

    2. 1 and 2

    3. 2 and 3

    4. 1 and 3

14. Match List (Investment Criteria) with List II (Economists) and select the correct answer using the codes

    List-I	List-II
    The SMP criterion The marginal per capita reinvestment criterion The marginal growth contribution criterion The time series criterion	Elasticity of substitution Spatial competition quasi rent monopolistic Monopolistic competition

    • A
    • B
    • C
    • D
    1. • 2
       • 3
       • 4
       • 1
    2. • 4
       • 1
       • 2
       • 3
    3. • 2
       • 1
       • 4
       • 3
    4. • 4
       • 3
       • 2
       • 1

15. Match List I with List II and select the correct answer using the codes given below the List:

    List-I	List-II
    Elasticity of substitution Spatial competition quasi rent Monopolistic competition	Hotelling Hicks Chamberlin Marshall Edgeworth

    • A
    • B
    • C
    • D
    1. • 2
       • 4
       • 5
       • 3
    2. • 3
       • 1
       • 4
       • 2
    3. • 2
       • 1
       • 4
       • 3
    4. • 3
       • 4
       • 5
       • 2