Question 1

What does the Lorenz curve represent?

Accepted Answer

The correct answer is: Income distribution. The Lorenz curve is a graphical representation developed by Max O. Lorenz in 1905 to show the distribution of income or wealth within an economy (inequality representation).

Question 2

Which of the below statements is correct?

Accepted Answer

The correct answer is: When economists study a market's price, their main goal is to figure out why the price is what it is and how it might change.. Statement D is correct. Statement A is wrong because Microeconomics studies individual behaviors (Macroeconomics studies the overall economy). Statement B is wrong for the opposite reason. Statement C is wrong because governments can regulate prices via caps/floors.

Question 3

What is the meaning of a 'Mixed Economy'?

Accepted Answer

The correct answer is: Both the public and private sectors are involved. A mixed economy is an economic system that blends elements of a market economy (private sector) with elements of a planned economy (public/state sector). India is a prime example.

Question 4

Which of the following is the relation that the law of demand defines?

Accepted Answer

The correct answer is: Price and quantity of a commodity. The Law of Demand states that, other things being equal (ceteris paribus), the quantity demanded of a commodity is inversely related to its price.

Question 5

What is Gross Domestic Product?

Accepted Answer

The correct answer is: The monetary value of all finished goods and services made within a country during a specific period.. Gross Domestic Product (GDP) is the total monetary or market value of all finished goods and services produced within a country's borders during a specific time period (usually annually).

Question 6

The 'Agreement on Technical Barriers to Trade (TBT)' is related to which institution?

Accepted Answer

The correct answer is: World Trade Organization. The Agreement on Technical Barriers to Trade (TBT Agreement) is an international treaty administered by the World Trade Organization (WTO) to ensure regulations/standards do not create unnecessary obstacles to trade.

Question 7

Commercial Paper (CP) is an unsecured money market instrument issued in the form of a:

Accepted Answer

The correct answer is: Promissory Note. Commercial Paper (CP) is an unsecured, short-term money market instrument issued by highly-rated corporations in the form of a promissory note.

Question 8

Bank rate is the rate at which the RBI extends credit to the:

Accepted Answer

The correct answer is: Commercial Banks. Bank Rate is the official rate at which the Reserve Bank of India (RBI) provides long-term loans and rediscounts bills for commercial banks without requiring collateral.

Question 9

Which five-year plan of India was based on the Mahalanobis model?

Accepted Answer

The correct answer is: Second. The Second Five-Year Plan (1956-1961), drafted by Prasanta Chandra Mahalanobis, focused on rapid industrialization and heavy basic industries.

Question 10

Which is NOT one of the four main factors of production?

Accepted Answer

The correct answer is: Manufacturing. The four classical factors of production are Land, Labour, Capital, and Entrepreneurship. Manufacturing is a production process/sector, not a fundamental factor of production.

Question 11

Which of the following taxes are abolished by the Goods and Services Tax?

Accepted Answer

The correct answer is: VAT. VAT (Value Added Tax) is an indirect tax that was abolished and subsumed under the Goods and Services Tax (GST) in 2017. Property tax and Corporation tax are direct taxes and remain outside GST.

Question 12

Hundies are normally

Accepted Answer

The correct answer is: Bills of Exchanges. Hundies are traditional financial instruments used in the Indian subcontinent for trade and credit transactions, serving as bills of exchange in informal banking.

Question 13

The term HUF is frequently found in taxation system in India, what does HUF stands for?

Accepted Answer

The correct answer is: Hindu Undivided Family. HUF stands for Hindu Undivided Family. It is recognized as a separate entity for assessment under the Indian Income Tax Act.

Question 14

Government strategy regarding exporters and importers is called

Accepted Answer

The correct answer is: Commercial policy. Commercial policy (also known as trade policy) refers to the regulations and agreements that control imports and exports between countries.

Question 15

Who is responsible for establishing and maintaining a sound and efficient accounting and financial reporting system in India?

Accepted Answer

The correct answer is: The Controller General of Accounts. The Controller General of Accounts (CGA), in the Department of Expenditure, Ministry of Finance, is responsible for establishing and maintaining a sound accounting system in the Union Government.

Question 16

How many times in a year does the RBI release the Monetary Policy?

Accepted Answer

The correct answer is: 6. The Reserve Bank of India (RBI) releases its monetary policy bi-monthly, which is 6 times in a financial year.

Question 17

Consider the following statements, choose the correct combination:
Statement-1: As per Indian motor vehicle act 1988, a comprehensive motor insurance policy is mandatory
Statement-2: Third-party liability insurance is optional for Indian vehicle

Accepted Answer

The correct answer is: Both statement-1 and Statement -2 are individually false. Under the M.V. Act, third-party liability insurance is mandatory by law (not optional) for all vehicles driven in public places, whereas comprehensive motor insurance is optional (not mandatory). Thus, both statements are false.

Question 18

Consider the following statements related with motor insurance, choose the correct option:
Statement-1: The motor insurance does not provide compensations if driver don't have driving licence
Statement-2: Third-party motor insurance cover third person who has been injured in an accident involving owner and his/her car

Accepted Answer

The correct answer is: Both statement (1) and statement (2) are individually true. Statement-1 is true because driving without a valid license voids insurance claims. Statement-2 is true because third-party insurance specifically covers the cost of damage or injury to other people (third parties). Both statements are true.

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