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C HA P T E R
ECONOMICS
7
1. Consider the following statements [2007-II] 7. By which one of the following years does the 11th Five Year
1. The current Economic Census is the seventh in the Plan aim at achieving 10% rural tele-density in India from
series so far conducted in India. the present 1.9%? [2008-II]
2. The Economic Census in India is undertaken by the (a) 2009 (b) 2010
Department of Economic Affairs (Union Ministry of (c) 2011 (d) 2012
Finance). 8. The 11th Five Year Plan strategy to raise agricultural output
Which of the statements given above is/are correct? envisages which of the following? [2008-II]
(a) Only 1 (b) Only 2 1. Greater attention to land reforms.
(c) Both l and 2 (d) Neither 1 nor 2 2. Double the rate of growth of irrigated area.
2. According to the provisions of the Fiscal Responsibility 3. Promote animal husbandry and fishery.
and Budget Management [FRBM]. 4. Interest free credit to the farmers.
Act., 2003 and FRBM Rules, 2004, the Government is under Select the correct answer using the codes given below
obligation to present three statements before the parliament (a) 1 and 3 (b) 2 and 3
along with the Annual Budget. Which one of the following (c) 1, 2 and 3 (d) 2 and 4
is not one of them? [2008-I] 9. Consider the following statements [2011-II]
(a) Macroeconomic Framework Statement 1. The current global economic crisis owes its genesis
(b) Fiscal Policy Strategy Statement to the subprime crisis in the United States.
(c) Medium-term Fiscal Policy Statement 2. The Indian economy is showing a faster recovery from
(d) Statement showing Short term Fiscal Policy the economic crisis than its western counterparts.
3. As per the Economic Survey 2007-2008, which one of the Which of the statements given above is/are correct?
following is the largest source of revenue of the Government (a) Only 1 (d) Only 2
of India? [2008-II] (c) Both 1 and 2 (d) Neither 1 nor 2
(a) Excise Duty (b) Personal income Tax 10. Which one of the following Public Sector Bank's emblem
(c) Corporation Tax (d) Customs Duties figures a dog and the words 'faithful friendly, in it?
4. The acronym SRO, being used in the capital market for [2011-II]
various market participants, stands for which one of the (a) Punjab National Bank
following? [2008-II] (b) Syndicate Bank
(a) Self regulatory Organisations (c) Oriental Bank of Commerce
(b) Small Revenue Operators (d) State Bank of India
(c) Securities Roll-back Operators 11. Consider the following statements with regard to Statutory
(d) Securities Regulatory Organisations Liquidity Ratio (SLR) [2011-II]
5. Consider the following statements [2008-II] 1. To meet SLR, Commercial banks can use cash only.
1. Food for Work Programme was launched in India 2. SLR is maintained by the banks with themselves.
during the 10th Five Year Plan. 3. SLR restricts the banks leverage in pumping more
2. The Planning commission in India is a constitutional money into the economy.
body. Which of the statements given above is/are correct?
Which of the statements given above is/are correct? (a) 1, 2 and 3 (b) 1 and 3
(a) Only 1 (b) Only 2 (c) 2 and 3 (d) only 2
(c) Both 1 and 2 (d) Neither 1 nor 2 12. Consider the following statements relating to estimation of
6. Which one of the following statements regarding National Income. [2011-II]
Monitorable Socio-Economic target of the 11th Five Year 1. Foreigners working in India Embassies are normal
Plan, under the head Environment, is not correct? residents of India.
[2008-II] 2. Foreigners working in the office of WHO, World Bank,
(a) Treat all urban waste water by 201 1-2012 to clear river UNO etc, located in India are not normal residents of
waters India.
(b) Increase energy efficiency by 20 percentage points 3. Indians working in foreign embassies in India are not
normal residents of India.
by 2016-1017
Which of the statements given above is/are not correct?
(c) Attain WHO standards of air quality in all major cities
by 2011-2012 (a) Only 1 (b) 1 and 3
(c) Only 3 (d) All of these
(d) Increase forest and tree cover by 15 percentage points
Economics C-195
13. Brent index is associated with [2011-II] 19. Consider the following statements about Sinking Fund
(a) crude oil prices (b) copper future prices [2011-II]
(c) gold future prices (d) shipping rate index 1. It is a method of repayment of public debt.
14. Match the following 2. It is created by the government out of budgetary
List I List II revenues every year.
(Phase of Industrial (Feature) Winch of the statements given above is/are contact?
Revolution) (a) Oniy 1 (b) Only 2
A. First Phase 1. Rise of steel, chemical, (c) Both 1 and 2 (d) Neither 1 nor 2
electricity industries 20. Match the following
B. Third Phase 2. Rise of cotton mill List I List II
C. Second Phase 3. Rise of steam engine (Five Year Plan) (Emphasis)
D. Fourth Phase 4. Rise of petro chemicals, A. First 1. Food security and women
jet aircraft, computers empowerment
[2011-II] B. Second 2. Heavy industries
Codes : C. Fifth 3. Agriculture and community
A B C D
development
(a) 2 3 1 4
D. Ninth 4. Removal of poverty
(b) 2 1 3 4
(c) 4 1 3 2 Codes :
(d) 4 3 1 2 A B C D
(a) 1 2 4 3
15. Consider the following statements [2011-II]
1. In India the minimum denomination coin acceptable (b) 1 4 2 3
for transaction is 50 paise. (c) 3 2 4 1
2. Coins below 50 praise is not a legal tender for payment. (d) 3 4 2 1
Which of the statements given above is/are correct? 21. Statement I Deficit financing does not lead to inflation if
(a) Only 1 (b) Only 2 adopted in small doses.
(c) Both 1 and 2 (d) Neither 1 nor 2 Statement II Deficit financing is an often used tool for
16. A recent survey (by Bloomberg) shows that the USA has financing budgetary deficits. [2011-II]
fallen behind emerging markets in Brazil, China and India as Codes :
the preferred place to invest. Why is it so? [2011-II] (a) Both the Statements are individually true and
1. Unstable economic situation of the USA which the Statement II is the correct explanation of Statement
global investors feel not likely to improve in the near (b) Both the Statements are individually true, but
future. Statement II is not the correct explanation of Statement
2. Global investors are finding Brazil, China and India to I
be actually more amenable to foreign investment. (c) Statement I is true, but Statement II is lalse
Select the correct answer using the code given below (d) Statement I is false, but Statement II is true
(a) Only 1 (b) only 2
(c) Both 1 and 2 (d) Neither 1 nor 2 22. Fiscal Policy in India is formulated by [2012-I]
17. India's market regulator SEBI is on course to relax investment (a) the Reserve Bank of India
norms for sovereign wealth funds, the investment vehicles (b) the Planning Commission
which are directly controlled by the government of a country. (c) the Finance Ministry
The main reason behind this move is [2011-II] (d) the Securities and Exchange Board of India
(a) the desire of the Government of India to attract more 23. Which of the following statements is/are correct?
foreign investment [2012-I]
(b) pressure by foreign Governments on India to execute 1. If a country is experiencing increase in its per capita
specific mutual agreements on financial services. GDP, its GDP must necessarily be growing.
(c) SEBI's desire to create a more level playing field for 2. If a country is experiencing negative inflation its GDP
foreign investors must be decreasing.
(d) RBI's relevant directives to SEBI Select the correct answer using the codes given below
18. Which of the following statements are correct? (a) Only 1 (b) Only 2
[2011-II] (c) Both 1 and 2 (d) Neither 1 nor 2
1. The global economy relied on oil for much of the 20th 24. National income ignores [2012-I]
century as a portable and indispensable fuel. (a) sales of a firm (b) salary of employees
2. The immense wealth associated with oil generates (c) exports of the IT sector (d) sale of land
political struggles to control it. 25. When the productive capacity of the economic systems of
3. History of petroleum is also the history of war and a state is inadequate to create sufficient number of jobs, it is
struggle. called [2012-I]
4. Nowhere is this more obviously the case of war and (a) seasonal unemployment
struggle than in West Asia and Central America. (b) structural unemployment
Select the correct answer using the codes given below (c) disguised unemployment
(a) 1, 2, 3 and 4 (b) 2 and 4 (d) cyclical unemployment
(c) 1 and 3 (d) 1, 2 and 3
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26. Which of the following statements is/ are correct? 3. inflation in emerging market economies:
[2012-I] 4. lag effect of monetary policy tightening.
1. NIFTY is based upon 50 firms in India. Select the correct answer using the codes given below
2. NIFTY is governed and regulated by the Reserve Bank (a) 1, 2 and 3 (b) 1, 2 and 4
of India. (c) 3 and 4 (d) 1, 2, 3 and 4
3. NIFTY does not trade in mutual funds. 34. Which of the following occupations are included under
Select the correct answer using the codes given below secondary sector as per the national income accounts ?
(a) Only 1 (b) Only 2
[2013-I]
(c) Only 3 (d) 1 and 3
27. Which of the following measures should be taken when an 1. Manufacturing
economy is going through in inflationary pressures? 2. Construction
[2012-I] 3. Gas and water supply
1. The direct taxes should be increased. 4. Mining and quarrying
2. The interest rate should be reduced. Select the correct answer using the codes given below
3. The public spending should be increased. (a) 1, 2, 3 and 4 (b) 1, 2 and 4
Select the correct answer using the codes given below (c) 1, 2 and 3 (d) 3 and 4
(a) Only 1 (b) Only 2 35. The government can influence private sector expenditure
(c) 2 and 3 (d) 1 and 2 by [2013-I]
28. Consider the following statements [2012-II] 1. taxation
1. High growth will led to inflation. 2. subsidies
2. High growth will lead to deflation. 3. macro-economic policies
Which of the statements given above is/are correct? 4. grants
(a) Only 1 (b) Only 2 Select the correct answer using the codes given below
(c) Both 1 and 2 (d) Neither 1 nor 2 (a) 1, 2, 3 and 4 (b) 1, 2 and 4
29. Which of the fallowing are responsible for the decrease of (c) 1, 2 and 3 (d) 3 and 4
per capita holding of cultivated land in India? [2012-II] 36. Which one among the following is a fixed cost to a
1. Low per capita income. manufacturing firm in the short run? [2013-I]
2. Rapid rate of increase of population. (a) Insurance on buildings
3. Practice of dividing land equally among the heirs.
(b) Overtime payment to worker
4. Use of traditional techniques of ploughing.
(c) Cost of energy
Select the correct answer using the codes given below
(a) 1 and 2 (b) 2 and 3 (d) Cost of raw materials
(c) 1 and 4 (d) 2,3 and 4 37. Which of the following are included in the category of direct
30. In the parlance of financial investment, the term bear denotes tax in India? [2013-I]
[2012-II] 1. Corporation tax 2. Tax on income
(a) an investor, who feels that the price of a particular 3. Wealth tax 4. Customs duty
security is going to fall 5. Excise duty
(b) an investor, who expects the price of a particular share Select the correct answer using the codes given below
to rise (a) 1, 2 and 3 (b) 1, 2, 4 and 5
(c) a shareholder, who has an interest in a company, (c) 2 and 3 (d) 1, 3, 4 and 5
financially or otherwise 38. The concept which tries to ascertain the actual deficit in the
(d) any lender, whether by making a loan or buying a bond revenue account after adjusting for expenditure of capital
31. Which one among the following is an appropriate nature is termed as [2013-I]
description of deflation? [2012-II] (a) revenue deficit
(a) it is a sudden fall in the value of a currency against (b) effective revenue deficit
other currencies (c) fiscal deficit
(b) It is a persistent recession in the economy (d) primary deficit
(c) It is a persistent fall in the general price level of goods 39. Which of the following institutions was/were asked by the
and services Government of India to provide official estimates of black
(d) It is fall in the rate of inflation over a period of time (unaccounted) money held by Indians, both in India and
32. The lower growth of coal production in India during 2011- abroad? [2013-I]
2012 was primarily due to [2013-I] 1. National Institute of Public Finance and Policy.
1. environmental restrictions. 2. National Council of Applied Economic Research.
2. non-availability of forestry clearance. 3. National Institute of Financial Management.
3. poor law and order situation in coal producing states. Select the correct answer using the codes given below
4. excessive rainfall in coal mining areas. (a) Only 1 (b) 1 and 2
Select the correct answer using the codes given below (c) 2 and 3 (d) All of these
(a) 1,2, 3 and 4 (b) 1, 2 and 3 40. FDI in Multi-Brand Retail Trade (MBRT) in all products is
(c) 2, 3 and 4 (d) 1 and 4 now permitted in India subject to [2013-I]
33. The sharp depreciation of rupee in the Forex market in the 1. a ceiling of 51%
year 2011 was due to [2013-I] 2. minimum amount to be brought in as FDI by the foreign
1. flight to safety by foreign investors. investor is US $ 100 million.
2. meltdown in European markets.
Economics C-197
3. atleast 50% of the procurement of manufactured/ 46. The main functioning of the banking system is to
processed products should be sourced from 'small [2013-II]
industries'. (a) accept deposits and provide credit
4. retail sales locations set-up only in cities with a (b) accept deposits and subsidies
population of more than 10 lakh.
Select the correct answer using the codes given below (c) provide credit and subsidies
(a) 1, 2, 3 and 4 (b) 1 and 4 (d) accept deposits, provide credit and subsidies
(c) Only 2 (d) 1, 2 and 4 47. The income elasticity of demand for inferior goods is
41. Which one among the following is not a salient feature of [2013-II]
the Companies Bill as amended in the year 2012? [2013-I] (a) less than one (b) less than zero
(a) For spending the amount earmarked for corporate (c) equal to one (d) greater than one
social responsibility, the company shall give 48. The average fixed cost curve will always be [2013-II]
preferences to local areas where it operates (a) a rectangular hyperbola
(b) Punishment for falsely inducing a person to enter into
an agreement with bank or financial institution with a (b) a downward sloping convex to the origin curve
view to obtaining credit facilities (c) a downward sloping straight line
(c) There is no limit in respect of companies in which a (d) a U-shaped curve
person may be appointed as auditor 49. In a perfectly competitive economy production and
(d) 'Independent directors' shall be excluded for the consumption will both be Pareto optimal, if the economy
purpose of computing 'one-third of retiring directors' operates at a point where [2013-II]
42. Which of the following factors was not a reason behind the (a) there is general equilibrium
occurrence of the Industrial Revolution in England first? (b) output levels are below equilibrium
[2013-II] (c) output levels are above equilibrium
(a) No part of the country was far from the sea (d) consumption is less than output
(b) Navigable rivers made inland transport easier. 50. If the average total cost is declining then [2013-II]
(c) In England machines could be operated by wind or (a) the marginal cost must be less than the average total
water power due to favourable climate condition cost
(d) England had coal, iron and other necessary mineral (b) total cost must be constant
resources (c) the average fixed cost curve must be above the average
43. Consider the following statements [2013-II] variable cost curve
1. The recent decision of Government of India to partially (d) the marginal cost must be greater than the average
decontrol the sugar industry gives the millers the total cost
freedom to sell sugar in open market and removes their 51. The production function of a firm will change whenever
obligation to supply sugar at subsidised rates to ration [2013-II]
shops. (a) input price changes
2. C. Rangarajan panel also suggested decontrolling of (b) the firm employs more of any input
sugar industry in India. (c) the firm increases its level of output
Which of the statements given above is/ are correct? (d) the relevant technology changes
(a) Only 1 (b) Only 2 52. The Government of India and Reserve Bank of India have
(c) Both 1 and 2 (d) Neither 1 nor 2 decided to introduce 1 billion pieces of ` 10 notes in polymer/
44. In India, the price of petroleum products has been plastic on a field trial basis.
deregulated mainly to [2013-II] Which of the following is/ are the objectives behind this
(a) reduce the burden of subsidies given to the oil move? [2013-II]
companies 1. Increase of the lifetime of the notes.
(b) discourage the exploration of oil reserves in the 2. Combating counterfeiting.
country 3. Reducing the cost of minting of currency.
(c) discourage the demand for private vehicles Select the correct answer using the codes given below
(d) curb the use of black money in the economy (a) 1 and 2 (b) Only 2
45. Which of the following factors is/are responsible for recent (c) Only 3 (d) All of the above
rapid slow down of Indian economy despite recovering from 53. Corporation tax is imposed by [2013-II]
the global financial crisis. [2013-II] (a) State Government
1. The boost to demand given by monetary and fiscal (b) Central Government
stimulus following the crisis was large. (c) Local Government
2. Starting in 2011-12, corporate and infrastructure (d) State as well as Central Government
investment started slowing both as a result of 54. The value of money varies [2013-II]
investment bottlenecks as well as the tighter monetary (a) directly with the, interest rate
policy. (b) directly with the price level
Select the correct answer using the codes given below (c) directly with the volume of employment
(a) Only 1 (b) Only 2 (d) inversely with the price level
(c) Both 1 and 2 (d) Neither 1 nor 2
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55. The effect of a government surplus upon the equilibrium (a) Profit from business (b) Capital gain
level of NNP [Net National Product] is substantially the (c) Interest on securities (d) Sale proceed of assets
same as [2013-II] 63. According to the Companies Act, 2013, 'nominal capital'
(a) an increase in investment implies [2014-I]
(b) an increase in consumption (a) such part of capital, which has been called for payment
(c) an increase in saving (b) the maximum amount of share capital of a company
(d) a decrease in saving (c) such part of capital, which has been received by a
56. Which bank is limited to the needs of agriculture and rural company from its shareholders
finance? [2013-II] (d) such capital as the company issues from time to time
(a) SBI (b) NABARD for subscription
(c) IFC (d) RBI 64. 'Inclusive growth' is a phrase used in India's [2014-I]
57. Share of food in total consumption expenditure has been 1. 9th Plan 2. 10th Plan
coming down as Per Capita Income grew over time in last 3. 11th Plan 4. 12th Plan
sixty years because [2014-I] Select the correct answer using the codes given below.
(a) people have been purchasing less food (a) 1, 2 and 3 (b) 2 and 4
(b) people have been preferring non-cereal items in their (c) 3 and 4 (d) Only 4
food basket 65. MONEX is associated with [2014-II]
(c) growth in food expenditure has been lower than growth (a) Montreal experiment (b) Monetary experiment
in per capita income (c) Lunar experiment (d) Monsoon experiment
(d) percentage of the poor in population has increased 66. Consider the following statements relating to the Non-
over time Alignment Movement: [2014-II]
58. In India, mergers and acquisition of firms are regulated by l. The Non-Aligned Movement (NAM) was created and
[2014-I] founded during the collapse of the colonial system
(a) National Manufacturing Competitiveness Council and the independence struggles of the peoples of
(b) Competition Commission of India Africa, Asia, Latin America and other regions of the
(c) Security and Exchange Board of India world and at the height' of the Cold War.
(d) Department of Industrial Policy and Promotion 2. The First Summit of the Movement of Non-Aligned
59. Classification of an enterprise into public or private sector Countries was convened by the leaders of India,
is based on [2014-I] Indonesia, Egypt, Syria and Yugoslavia at Belgrade
(a) number of employees in the enterprise on September 1-6, 1961.
(b) ownership of assets of the enterprise 3. During the early days of the Movement, its actions
(c) employment conditions for workers in the enterprise were a key factor in the decolonization process, which
(d) nature of products manufactured by the enterprise led later to the attainment of freedom by many
60. Which of the following statements about India's countries and to the founding of several new
unorganised sector are true? [2014-I] sovereign States.
1. Labour is more in number than that in the organised 4. The fundamental principle of the movement is to
sector. maintain equal distance from both the super powers
2. Job security and work regulation are better in by joining the military alliances of both the blocs.
unorganised sector. Which of the statements given above are correct ?
3. They are usually not organised into trade unions. (a) l, 2 and 3 (b) 2 and 3 only
4. Workers are usually employed for a limited number of (c) 1, 3 and 4 (d) l and 2 only
days. 67. Consider the following statements relating to the World Bank :
Select the correct answer using the code given below [2014-II]
(a) 1, 2 and 4 (b) 1, 3 and 4 1. The World Bank was established in 1946, which is
(c) 3 and 4 (d) 1 and 3 headquartered in New York.
61. In India, contribution of food inflation to overall inflation is 2. The World Bank Group has set for itself the goal to
1 2 end extreme poverty from the World by 2030.
around rd to th . Within food inflation, contribution of 3. The World Bank is a vital source of financial and
3 5 technical assistance to developing countries around
food articles is higher because price rise in food articles is the world. It. is not a bank in the ordinary sense but a
[2014-I] unique partnership to reduce poverty and support
(a) higher and their weight is also higher compared to development.
food products 4. The World Bank Group comprises five institutions
(b) higher but their weight is lower compared to food managed by their member countries in order to
products promote shared prosperity by fostering the income
(c) lower but their weight is higher compared to food growth of the bottom 40% for every country.
products Which of the statements given above are correct?
(d) lower and their weight is also lower compared to food (a) 1, 2 and 3 (b) 2, 3 and 4
products (c) 1, 3 and 4 (d) 2 and 4 only
62. Corporation tax in India is levied on income of a company. 68. Which of the following statements about International
Which one of the following does not include Corporation Monetary Fund (IMF) are correct ? [2014-II]
tax? [2014-I]
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1. The IMF is a United Nations specialized agency. 2. If increase in demand is of greater magnitude than
2. Th e IMF was founded at the Bretton Woods increase in supply, both equilibrium price and
Conference in 1944 to secure international monetary equilibrium quantity will increase.
cooperation. 3. If increase in supply is of greater magnitude than
3. The objective of the IMF is to stabilize currency increase in demand, equilibrium price will fall but
exchange rates, and to expand international liquidity equilibrium quantity will increase.
(access to hard currencies). Select the correct answer using the code given below :
Select the correct answer using the code given below : (a) 1 only I (b) 1 and 2 only
(a) 1, 2 and 3 (b) 2 and 3 only (c) 2 and 3 only (d) 1, 2 and 3
(c) 1 and 2 only (4) 1 and 3 only 74. A market in which there are large numbers of sellers of a
69. Consider the following statements relating to the World particular product, but each seller sells somewhat
Trade Organization (WTO): [2014-II] differentiated but close products is termed as [2014-II]
1. The WTO deals with the global rules of trade between (a) Perfect competition (b) Monopoly
nations. (c) Monopolistic competition(d) Oligopoly
2. The goal of the WTO is to help producers of goods 75. The value of all final goods and services produced by the
and services, exporters, and importers conduct their normal residents of a country and their property, whether
business. operating within the domestic territory of the country or
3. The WTO, which is a successor body of the General outside in a year is termed as [2014-II]
Agreement on Tariffs and Trade, came into being (a) Gross National Income (b) Net National Income
following the Uruguay Round of Negotiations. (c) Gross Domestic Product (d) Net Domestic Product
4. The WTO distances itself in framing of rules on trad 76. Which of the following statements are correct? [2014-II]
in intellectual property rights. 1. When marginal revenue is positive, total revenue
Which of the statements given above are correct? increases with increase in output.
(a) l, 2 and 3 (b) 2, 3 and 4 2. When marginal revenue is zero, total revenue is
(c) 1, 2 and 4 (d) 1 and 3 only maximum.
70. World Bank in June 2014 released a study report on India's 3. When marginal revenue becomes negative, total
Power Sector titled 'More Power' to India : The Challenge of revenue falls with increase in output.
Electricity Distribution'. Which of the following is/are the Select the correct answer using the code given below:
key recommendation(s) of the report ? [2014-II] (a) 1 and 2 only (b) 2 and 3 only
1. Ensure regulatory autonomy, effectiveness and (c) 1 and 3 only (d) 1, 2 and 3
accountability for utilities and regulators
77. National product at factor cost is equal to [2014-II]
2. Insulate utilities from State Governments to prevent
(a) Domestic product + Net factor income from abroad
interference with internal operations
(b) National product at market prices - indirect taxes +
3. Scrap the Electricity Act 2003 in order to improve the
revenue generation of the power distribution subsidies
companies 1. (c) Gross domestic-product - depreciation
Select the correct answer using the code given below : (d) National product at market prices + Indirect taxes +
(a) 1, 2 and 3 (b) l and 2 only subsidies
(c) 2 only (d) 1 and 3 only 78. Which of the following theories form the basis of
71. Which one among the following pairs is not correctly international trade ? [2014-II]
matched ? [2014-II] 1. Absolute cost difference
(a) When total product : Marginal 2. Comparative cost difference
increases at an product 3. Opportunity cost
increasing rate increases Select the correct answer using the code given below:
(b) When total product : Marginal (a) 1 only (b) 2 only
increases at a product (c) 1 and 2 only (c) 1,2 and 3
diminishing rate , declines 79. Which one among the following is not a source of tax
(c) When total product : Marginal revenue for the Central Government in India ? [2014-II]
reaches its product (a) Income tax (b) Customs duuties
maximum becomes (c) Service tax (d) Motor Vehicle tax
zero 80. Which of the following does not form part of current account
(d) When total product : Marginal of Balance of Payments? [2014-II]
begins to decline product (a) Export and import of goods
becomes (b) Export and import of services
positive (c) Income receipts and payments
72. The way total output changes due to change in all inputs in (d) Capital receipts and payments
same proportion is known as law of [2014-II] 81. Which of the following is not the recommendation of the
(a) Returns to scale (b) Diminishing returns Arvind Mayaram Committee on Rationalizing the FDI/FPI
(c) Increasing returns (d) Constant returns definition (June 2014) ? [2014-II]
73. Which of the following statements is/are true? [2014-II]
(a) Foreign investment of 10 per cent or more in a listed
1. If increase in demand and supply are of equal
company will be treated as foreign direct investment
magnitude, the price will remain unchanged, but the
equilibrium quantity will increase. (FDI)
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(b) In a particular company, an investor can hold the 89. Which one of the following is the major source of gross tax
investments either under the FPI (Foreign Portfolio revenue (GTR) for the Government of India? [2015-II]
Investment) route or under the FDI route, but not both (a) Income tax (b) Corporation tax
(c) Any investment by way of equity shares, compulsorily
convertible preference shares debentures which is less (c) Customs duty (d) Service tax
than 10 per cent of the post issue paid up equity capital 90. Which of the following statements in the context of income-
of a company shall be treated as FPI environment relationship is /are correct? [2015-II]
(d) On NRI Investors, the Committee recommended (1) Pollution trends tend to follow an inverse-U shaped
treating non-repatriable invesnnent as FDI relationship across different stages of economic
82. Which of the following statements is/are correct ? development.
[2015-I] (2) In the beginning stage, pollution increases due to
1. The Marxist theory repudiates the idea of the atomised urbanization and industrialization.
and alienated individual. (3) In the later stage, pollution declines due to structural
2. Marxism upholds the idea of the natural rights of men
changes towards services sector.
and individuals.
Select the correct answer using the code given below : Select the correct answer using the code given below.
(a) 1 only (b) 2 only (a) 1 only (b) 1 and 2 only
(c) Both 1 and 2 (d) Neither 1 nor 2 (c) 1, 2 and 3 (d) 2 and 3 only
83. Demand for a commodity refers to [2015-I] 91. Which one of the following represents a progressive tax
(a) Desire for that commodity structure? [2015-II]
(b) Need for that commodity (a) Tax rate is the same across all incomes
(c) Quantity demanded of that commodity (b) Tax rate increases as income increases
(d) Quantity demanded at certain price during any (c) Tax rate decreases as income increases
particular period of time (d) Each household pays equal amount of tax
84. An exceptional demand curve is one that slopes [2015-I]
(a) downward to the right (b) upward to the right 92. Which one of the following is an example of a 'natural
(c) horizontally (d) upward to the left monopoly'? [2015-II]
85. Rise in the price of a commodity means [2015-I] (a) Indian Airlines
(a) rise in the value of currency only (b) Delhi Jal Board
(b) fall in the value of currency only (c) Delhi Transport Corporation
(c) rise in the value of commodity only (d) Steel Authority of India
(d) fall in the value of currency and rise in the value of 93. What is meant by price discrimination? [2015-II]
commodity. (a) Increase in price of a commodity over time
(b) A situation where the same product is sold to different
86. Under flexible exchange rate system, the exchange rate is
consumers for different prices
determined [2015-II]
(c) Subsidization of a product by the Government to sell it
(a) predominantly by market mechanism
at a lower price
(b) by the Central Bank (d) General decrease in price of a commodity over time
(c) as a weighted index of a group of currencies 94. What is meant by 'Public Good'? [2015-II]
(d) by the World Trade Organization
(a) A commodity produced by the Government
87. Which one of the following is not correct in the context of
(b) A commodity whose benefits are indivisibly spread
industrial clusters development in India? [2015-II]
among the entire community
(a) Industrial clusters play an important role for the MSME
participants in their inclusiveness, technology (c) A Government scheme that benefits the poor
absorption and efficiency improvement households
(b) Industrial clusters are visible in traditional handloom, (d) Any commodity that is very popular among general
handicrafts and modern SME public
(c) Industrial cluster programmes in India are administered 95. In view of the fact that kerosene is an inferior good in India,
by various ministries what is/are its implication(s)? [2015-II]
(d) Industrial clusters lead to promotion of monopoly in 1. As households get richer, they consume less kerosene.
the market 2. Over time there is a decline in quality of kerosene.
88. Private investment in Indian agriculture is mostly on labour- 3. Government needs to stop subsidies on kerosene.
saving mechanization. This could be a response to Select the correct answer using the code given below.
[2015-II] (a) 1 only (b) 1 and 2 only
(a) rising productivity of agricultural sector (c) 2 and 3 only (d) 1, 2 and 3
(b) rising inequality in agriculture 96. Which of the following factors led to a decline in inflation
(c) rising wages and tighter labour market rate in India during 2014-2015? [2015-II]
(d) debt write-off by the Government 1. Persistent decline in crude oil prices
Economics C-201

2. Softness in global prices of tradables such as edible 2. The Benefit Principle of taxation states that individuals
oils and coal should be taxed in proportion to the benefit they
3. Tight monetary policy pursued by the Reserve Bank receive from Government programmes
of India 3. A progressive tax takes a larger share of tax from poor
families than it does from rich families
Select the correct answer using the code given below.
4. Indirect taxes have the advantage of being cheaper
(a) 1 only (b) 1 and 2 only
and easier to collect
(c) 2 and 3 only (d) 1, 2 and 3 Select the correct answer using the code given below:
97. Which one of the following statements about the Companies (a) 1 and 3 only (b) 2 and 4 only
Act, 2013 is not correct? [2015-II] (c) 1, 2 and 4 only (d) 1, 2, 3 and 4
(a) The Act regulates the corporate sector to make it 104. Which of the following statement (s) is /are false?[2016-I]
accountable. 1. Wage Boards are tripartite in nature, with
(b) It provides for Corporate Social Responsibility. representatives from workers, employers an d
(c) It provides more opportunities for new entrepreneurs. independent members.
(d) It enables wide application of Information Technology. 2. Except for the wage Board for Journalists and Non -
98. Which one of the Five Year Plans had a high priority to Jouralists, all the other wage boards are statutory in
bring inflation under control and to achieve stability in the nature
economic situation? [2016-I] 3. Second National Commission on labour has
(a) Fourth Plan (1969 - 74) (b) Fifth Plan (1974 - 79) recommended against the utility of wages boards.
(c) sixth Plan (1980 - 85) (d) Seventh Plan (1985 - 90) Select the correct answer using the code given below:
99. Which of the following statements is / are true with respect (a) 1 only (b) 2 only
to Phillips curve? [2016-I] (c) 1 and 2 only (d) 1, 2 and 3
1. It shows the trade - off between unemployment and 105. Which of the following is not a ‘Public Good’? [2016-I]
inflation (a) Electricity (b) National Defence
2. The downward sloping curve of Phillips curve is (c) Light House (d) Public Parks
generally held to be valid only in the short run. 106. Which of the following is / are the example (s) of Transfer
3. In the long run , Phillips Curve is usually thought to be Payment(s)? [2016-I]
horizontal at the non accelerating inflation rate of 1. Unemployment Allowance
unemployment (NAIRU) 2. Payment of salary
Select the correct answer using the code given below: 3. Social Security Payment
(a) 1 only (b) 2 and 3 only 4. Old age Pension
(c) 1 and 2 only (d) 1, 2 and 3 Select the correct answer using the code given below :
100. Which of the following is /are example (s) of ‘Near Money’? (a) 1 and 3 only (b) 1, 2 and 3 only
1. Treasury Bill [2016-I] (c) 1, 3 and 4 only (d) None of the above
2. Credit Card 107. Which of the following statements (s) are true with respect
3. Saving accounts and small time deposits to the concept of “EFFICIENCY” as used in mainstream
4. Retail money market mutual funds economics? [2016-I]
Select the correct answer using the code given below: 1. Efficiency occurs when no possible recorganisation of
(a) 1 only (b) 2 only production can make anyone better off with out making
(c) 1, 2 and 3 (d) 1, 3 and 4 someone else worse off
101. Which one of the following terms is used in Economics to 2. An economy is elearly inefficient if it is inside the
denote a technique for avoiding a risk by making a Production Possibility Frontier (PPF)
counteracting transaction? [2016-I] 3. At a minimum, an efficient economy is on its Production
(a) dumping (b) Hedging Possibility Frontier (PPF)
(c) Discounting (d) Deflating 4. The terms such as ‘ Pareto Efficiency’, ‘Pareto
102. Which one of the following is not a thrust area in the railway Optimality’ and ‘Allocative Efficiency’ are all
budget 2015 - 16? [2016-I] essentially one and same which denote ‘efficiency in
(a) Online booking of disposable bed rolls resource allocation’
(b) Defence Travel System to eliminate Warrants Select the correct answer using the code given below :
(c) 180 days in advance ticket booking facility for (a) 1 and 4 only (b) 1 and 3 only
passengers (c) 2 and 3 only (d) 1, 2, 3 and 4
(d) Bio - Toilets 108. The headquarters of 'Economic and Social Commission for
103. Which of the following statements are correct? [2016-I] Asia and the Pacific' is located at [2016-II]
1. Ability to pay principle of taxation holds that the (a) Singapore (b) Manila
amount of taxes people pay should relate to their (c) Bangkok (d) Hong Kong
income or wealth
 202
C- Economics

109. Which of the following with regard to the term 'bank run' is 117. Who among the following is the Chairman of the Fourteenth
correct? [2016-II] Finance Commission? [2016-II]
(a) The net balance of money a bank has in its chest at (a) C. Rangarajan (b) Vijay Kelkar
the end of the day's business (c) Y. V. Reddy (d) Rakesh Mohan
(b) The ratio of bank's total deposits and total liabilities 118. Which one of the following statements is correct?
(c) A panic situation when the deposit holders start [2017-I]
withdrawing cash from the banks For the purpose of Census 2011
(d) The period in which a bank creates highest credit in (a) a person aged seven and above who can both read
the market and write with understanding in any language is treated
110. Which of the following will be the outcome if an economy is as a literate
under the inflationary pressure? [2016-II] (b) a person aged eight and above who can both read and
1. Domestic currency heads for depreciation. write with understanding in any language is treated as
2. Exports become less competitive with imports getting a literate
costlier. (c) a person aged nine and above who can both read and
3. Cost of borrowing decreases. write with understanding in any language is treated as
4. Bondholders get benefitted. a literate
Select the correct answer using the code given below. (d) a person aged ten and above who can both read and
(a) 1 and 2 (b) 2 and 3 write with understanding in any language is treated as
(c) I and 3 only (d) 1, 3 and 4 a literate
111. According to the Classical Theory of Employment, 119. Consider the following statements about the Second Five-
deviations from the state of full employment are [2016-II] Year Plan : [2017-I]
(a) purely temporary in nature 1. It was drafted under the leadership of K. N. Raj.
(b) permanent in nature 2. It proposed that industries like electricity, railways,
(c) imaginary situations steel, machineries and communication could be
(d) normal situations developed in the public sector.
112. Capital deepening refers to [2016-II] 3. The drafters found balancing industry and agriculture
(a) going for more fixed capital per worker very difficult.
(b) emphasis on social overhead capital 4. The drafters found balancing industry and agriculture
(c) constant capital-output ratio really easy.
(d) increasing capital-output ratio Which of the statements given above is/are correct?
113. Which one of the following statements is not correct? (a) 1 only (b) l and 2
[2016-II] (c) 2 and 3 (d) 3 and 4
(a) Creation of National Investment and Infrastructure Fund 120. Which one of the following is not a component of Revenue
(NIIF) was announced in the Union Budget, 2015-16. Receipts of the Union Government? [2017-I]
(b) NIIF is a fund for enhancing infrastructure facility in (a) Corporate tax receipts
the country. (b) Dividends and profits
(c) NIIF and NIF (National Investment Fund) are the (c) Disinvestment receipts
names of the same organization, (d) Interest receipts
(d) NIIF can have more than one alternative investment 121. TRIPS Agreement pertains to [2017-I]
fund, (a) international tariff regime
114. Which one of the following statements is correct with (b) intellectual property protection
respect to the composition of national income in India? (c) international practices on trade facilitation
[2016-II] (d) international taxation of property
(a) The share of manufacturing sector has declined. 122. The 76% growth rate registered by Indian economy during
(b) The share of services sector has increased sharply. the year 2015-16 is based on [2017-I]
(c) The share of agriculture has remained static. (a) Gross National Product at market prices
(d) The share of services sector has declined. (b) Gross Value Added at constant prices
115. In India, the term 'hot money' is used to refer to [2016-II] (c) Gross Domestic Product at market prices
(a) Currency + Reserves with the RBI (d) Gross Domestic Product at constant prices
(b) Net GDR 123. Which of the following statements about the Trans-Pacific/
(c) Net Foreign Direct Investment Partnership (TPP) is / are correct? [2017-I]
(d) Foreign Portfolio Investment 1. The TPP was signed by 12 Pacific Rim nations in the
116. Which one of the following is/are credit rating agency/ year 2015.
agencies in India ? [2016-II] 2. The TPP is likely to be a game-changer in global trade
(a) CRISIL (b) CARE as member countries account for about 40 percent of
(c) ICRA (d) All of the above global GDP.
3. India is a founder member of TPP.
Economics C-203

Select the correct answer using the code given below. 131. Arrange the following events in sequential order as they
(a) 1, 2 and 3 (b) 1 and 2 only happened in India :
(c) 2 and 3 only (d) 1 only 1. Mahalanobis Model
124. Which of the following statements about Bitcoin is/are 2. Plan Holiday
correct? [2017-I] 3. Rolling Plan
1. It is a decentralized virtual currency. Select the correct answer using the code given below.
2. It is generated through complex computer software (a) 1, 2, 3 (b) 3, 2, 1
systems. (c) 2, 3, 1 (d) 1, 3, 2
132. The monetary policy in India uses which of the following
3. The Reserve Bank of India recognized it as a legal tender
tools?
in January 2016.
1. Bank rate 2. Open market operations
Select the correct answer using the code given below.
3. Public debt 4. Public revenue
(a) 1 only (b) 1 and 2 only Select the correct answer using the code given below.
(c) 2 and 3 only (d) 1, 2 and 3 (a) 1 and 2 only (b) 2 and 3 only
125. In the year 2016, the Government of India announced a (c) 1 and 4 only (d) 1, 2, 3 and 4
` 6,000 crore special package for the textile and apparel sector 133. Devaluation of currency will be more beneficial if prices of
to [2017-I] (a) domestic goods remain constant
1. create one crore jobs within three years (b) exports become cheaper to importers
2. create jobs equally for men and women (c) imports remain constant
3. provide tax and production incentives for the (d) exports rise proportionately
entrepreneurs 134. Which of the following indicators have been used by the
Select the correct answer using the code given below. World Economic Forum to calculate Global Competitiveness
(a) 1 only (b) 2 and 3 only Index for 2016–2017?
(c) 1 and 3 only (d) 1, 2 and 3 1. Efficiency enhancer subindex
126. The Twelfth Five-Year Plan focussed on inclusive growth. 2. Innovation and sophistication factors subindex
Which of the following were considered as challenges for 3. Life expectancy enhancer subindex
inclusiveness ? [2017-I] Select the correct answer using the code given below.
1. Poverty 2. Group inequality (a) 1 and 2 only (b) 2 and 3 only
3. Regional imbalance 4. Unemployment (c) 1 and 3 only (d) 1, 2 and 3
135. In India, the base year of the new GDP series has been
Select the correct answer using the code given below.
shifted from 2004-05 to
(a) 1, 3 and 4 only (b) 1, 2, 3 and 4
(a) 2007 - 08 (b) 2008 - 09
(c) 1, 2 and 4 only (d) 2 and 3 only
(c) 2010 - 11 (d) 2011 - 12
127. The Most Favoured Nation (MFN) Clause under WTO 136. Match List-I with List-II and select the correct answer using
regime is based on the principle of [2017-I] the code given below the Lists :
(a) non-discrimination between nations List-I List-II
(b) discrimination between nations (Type of Deficit) (Explanation)
(c) differential treatment between locals and foreigners A. Fiscal Deficit 1. Total Expenditure– Revenue
(d) uniform tariff across commodities Receipts & Non-debt
128. Goods and Services Tax likely to be levied in India is not a Capital Receipts
[2017-I] B. Revenue Deficit 2. Revenue Expenditure –
(a) gross value tax (b) value-added tax Revenue Receipts
(c) consumption tax (d) destination-based tax C. Effective Revenue 3. Revenue Deficit –Grants for
129. Which one of the following sectors is not affected by the Deficit Creation of Capital Assets
changes made in the Foreign Direct Investment Policy in D. Primary Deficit 4. Fiscal Deficit –
June 2016? [2017-I] Interest Payments
(a) Multi-brand retailing Code :
(b) Defence A B C D
(c) Private security agencies (a) 1 2 3 4
(d) Manufacturing of small arms and ammunitions covered (b) 1 3 2 4
(c) 4 2 3 1
under the Arms Act, 1959
(d) 4 3 2 1
130. BREXIT refers to the Great Britain leaving which one of the
137. Who among the following scholars argued that “capital
following? [2017-I] created underdevelopment not because it exploited the
(a) International Monetary Fund underdeveloped world, but because it did not exploit it
(b) Commonwealth enough”?
(c) World Trade Organization (a) Bill Warren (b) Paul Baran
(d) European Union (c) Geoffrey Kay (d) Lenin
C- 204 Economics

138. Which one of the following is not an exclusive right of the Select the correct answer using the code given below.
concerned coastal nations over Exclusive Economic Zone (a) 1 only (b) 2 only
(EEZ)? [2018-1] (c) Both 1 and 2 (d) Neither 1 nor 2
(a) Survey and exploitation of mineral resources of ocean 142. Growth in production (in percent) of which one of the
deposits following core industries in India during the period
(b) Exploitation of marined water energy and marine 2015-2016 was negative? [2018-1]
organisms including fishing (a) Natural gas (b) Refinery products
(c) Conservation and management of marine resources (c) Fertilizer (d) Coal
143. Which one of the following events is not correctly matched
(d) Navigation of ships and laying down submarine cables
with the year in which it happened? [2018-1]
139. Which one of the following statements about Exchange-
(a) Inauguration of the SWIFT system of electronic
Traded Fund (ETF) is not correct? [2018-1]
interbank fund transfers worldwide—1985
(a) It is a marketable security.
(b) Conclusion of the Uruguay Round of GATT—1994
(b) It experiences price changes throughout the day. (c) Inauguration of the World Trade Organization—1995
(c) It typically has lower daily liquidity and higher fees (d) Establishment of the first wholly electronic stock
than mutual fund shares. exchange (Nasdaq)—1971
(d) An ETF does not have its net asset value calculated 144. Consider the following statements about impact of tax:
once at the end of every day. [2018-1]
140. The Reserve Bank of India has recently constituted a high- 1. A tax is shifted forward to consumers if the demand
level task force on Public Credit Registry (PCR) to suggest is inelastic relative to supply.
a road map for developing a transparent, comprehensive 2. A tax is shifted backward to producers if the supply
and near-real-time PCR for India. The task force is headed is relatively more inelastic than demand.
by [2018-1] Which of the statements given above is/are correct?
(a) Sekar Karnam (b) Vishakha Mulye (a) 1 only (b) 2 only
(c) Sriram Kalyanaraman (d) Y. M. Deosthalee (c) Both 1 and 2 (d) Neither 1 nor 2
141. Which of the following statements about the India Post 145. According to the law of diminishing marginal utility, as the
Payments Bank (IPPB) is/are correct? [2018-1] amount of a good consumed increases, the marginal utility
1. It h as been incorporated as a Public Limited of that good tends to [2018-1]
Company. (a) improve
2. It started its operation by establishing two pilot (b) diminish
branches at Hyderabad and Varanasi. (c) remain constant
(d) first diminish and then improve

HINTS & SOLUTIONS

1. (d) In 1976, Government of India launched a plan scheme 4. (a) A self-regulatory organization (SRO) is a non-govern-
called "Economic Census and Surveys". In 1977 Central mental organization that has the power to create and
Statistical Organisation conducted First economic enforce industry regulations and standards. The prior-
census in collaboration with the Directorate of ity is to protect investors through the establishment of
Economics & Statistics (DES) in the States/Union rules that promote ethics and equality.
Territories. Current Economic Census is Sixth Economic 5. (a) According to The National Food for Work Programme,
Census held in 2013.
food subsidy should be better targeted through
The Central Statistics Office (CSO) in the Ministry of
Statistics and Programme Implementation (MOSPI) targeted public distribution system and specific
conducted the Sixth Economic Census during January, programmes for the poor like Food for Work Programme.
2013 to April, 2014 in collaboration with Directorates of The National Food for Work Programme was launched
Economics and Statistics in all the States and Union on 14 November 2004 in 150 of the most backward
Territories. districts of India with the objective of generating
2. (d) The Act requires the government to lay before the supplementary wage employment. The Planning
parliament three policy statements in each financial year commission is not a constitutional body.
namely Medium Term Fiscal Policy Statement; Fiscal 6. (d) Target of 11th Five Year Plan is to increase forest and
Policy Strategy Statement and Macroeconomic
tree cover by 5 percentage points.
Framework Policy Statement.
3. (c) As per economic survey 2007-2008 corporation tax is 7. (d) The aim of 11th Five Year Plan is to connect every
the largest source of revenue of the Government of village by telephone and provide broadband
India. connectivity to all villages by 2012.
Economics C-205
8. (c) 11th Five Year Plan's initiatives for agriculture were: 20. (c) 1. First Five Year Plan (1951-56)- Agriculture and
• Focusing on land reform issues community development
• Doubling the rate of growth of irrigated area 2. Second Five Year Plan (1956-61)- Heavy Industry
• Promoting animal husbandry and fishery 3. Fifth Five Year Plan (1974-79)- Removal of Poverty
• Providing easy access to credit at affordable rates 4. Ninth Five Year Plan (1997-2002)- Food Security
9. (c) The U.S. subprime mortgage crisis was a nationwide and woman empowerment
banking emergency that coincided with the U.S. 21. (b) Deficit Financing is an expansionist device of currency
recession of December 2007 - June 2009. It was machine and is accompanied by inflation and has many
triggered by a large decline in home prices, leading to adverse effects on the economy. It has also been
mortgage delinquencies and foreclosures and the compared to a drug market in red 'Poison' which is
devaluation of housing-related securities. India has not prescribed for a certain purpose and has to be
only shown greater resistance during financial crises administered in small regulated dose. When the outlay
but it was one of the countries showing the fastest of a government exceeds its tax revenues, the
recovery too. This financial crisis displayed the government budget is said to be in deficit; government
robustness of Indian economy. It has also helped in spending in excess of tax receipts is known as deficit
further fine-tuning our economic policies and changing spending. Governments usually issue bonds to match
the vision of various corporate. their deficit.
10. (b) Syndicate Bank. The symbol of dog implies that Bank 22. (c) The Department of Economic Affairs (DEA) under
is trustworthy and a friend. Its slogan is : Your faithful Ministry of Finance is the nodal agency of the Union
and friendly financial partner. Government to formulate and monitor country's
11. (c) SLR used by bankers indicates the minimum percentage economic policies and programmes having a bearing
of deposits that the banks have to maintain in the form on domestic and international aspects of economic
of gold, cash or other approved securities. management.
12. (b) Only statement 2 is correct. Statements 1 & 3 are wrong. 23. (c) Negative inflation is decrease in price level and
13. (a) Brent Crude is a major trading classification of sweet economic growth is defined as GDP. A decrease in
light crude oil that serves as a major benchmark price inflation means the prices has fallen. So, there is
for purchases of oil worldwide. Brent Crude is extracted increase in purchasing power of money. It increases
from the North Sea and comprises Brent Blend, Forties consumption, therefore GDP increases.
Blend, Oseberg and Ekofisk crudes .The Brent Crude 24. (d) National Income ignores sale of land.
oil marker is also known as Brent Blend, London Brent 25. (b) Cyclical unemployment is unemployment that results
and Brent petroleum. The index represents the average when the overall demand for goods and services in an
price of trading in the 25 day Brent Blend, Forties, economy cannot support full employment. It occurs
Oseberg, Ekofisk (BFOE) market in the relevant delivery during periods of slow economic growth or during
month as reported and confirmed by the industry media. periods of economic contraction.
14. (a) Phases of Industrial Revolution: 26. (d) NIFTY is an Index computed from performance of top
1. First phase- Rise of Cotton mill stocks from different sectors listed on NSE (National
2. Second phase- Rise of steel, chemicals, electricity stock exchange). NIFTY consists of 50 companies from
industries. 24 different sectors. Indian Capital Markets are
3. Third phase- Rise of steam engine regulated and monitored by the Ministry of Finance,
4. Fourth phase- Rise of petrochemicals, jet aircraft, The Securities and Exchange Board of India and The
computers Reserve Bank of India. It does not trade in mutual funds.
15. (c) India has already banned 25-paisa coin. Now 50-paisa 27. (a) Cost-push inflation occurs when businesses respond
is the minimum denomination coin. to rising costs, by increasing their prices to protect
16. (c) According to Bloomberg LP, an American company, profit margins. There are many reasons why costs might
the economy of USA is fallen. Instead, Brazil, India, rise: Component costs, Rising labour costs and higher
China have emerged as investor-friendly nations. indirect taxes imposed by the government. So, the
17. (a) The main reason behind this move is the desire of the direct taxes should be increased when an economy is
government of India to attract more foreign investment. going through in inflationary pressures.
18. (a) All statements are correct. 28. (a) Typically, higher inflation is caused by strong economic
19. (c) A sinking fund is a fund created by the government growth. If Aggregate demand in an economy expanded
and gradually accumulated every year by setting aside faster than aggregate supply, we would expect to see a
a part of current public revenue in such a way that it higher inflation rate. If demand is rising faster than
would be sufficient to pay off the funded debt at the supply, then this suggests that economic growth is
time of maturity. Under this method, the aggregate higher than the long run sustainable rate of growth.
burden of public debt is least felt, as the burden of Note: A sustained rise in prices is known as inflation. A
taxing the people to repay the debt is spread evenly large rise in prices is often caused by economic growth.
over the period of the accumulation of the fund. The 29. (b) Rapid rate of increase of population and practice of
preferable alternative for the government is to raise a dividing land equally among the heirs are responsible
new loan and credit the proceeds of sinking fund. It is for the decrease of per capita holding of cultivated
a separate fund established by a government. land in India.
 206
C- Economics
30. (a) The term bear denotes an investor who believes that a companies.
particular security or market is headed downward. Bears 42. (c) On the natural side England has in abundance three
attempt to profit from a decline in prices. Bears are important commodities - water, iron and coal. Water in
generally pessimistic about the state of a given market. Britain's numerous hilly districts provides the power
Bearish sentiment can be applied to all types of markets to drive mills in the early stages of industrialization;
including commodity markets, stock markets and the the rivers, amplified from 1761 by a developing network
bond market. of canals, facilitate inland transport in an age where
31. (c) Deflation is defined as a fall in the general price level of roads are only rough tracks; and the sea, never far
goods and services. It is a negative rate of inflation. It from any part of Britain, makes transport of heavy goods
means the value of money increases rather than easy between coastal cities.
decreases. 43. (c) The decision to partially decontrol the sugar sector
32. (d) The lower growth of coal production in India during was taken by the Cabinet Committee on Economic
2011-2012 was primarily due to environmental Affairs (CCEA). This gives millers the freedom to sell
regulations and Off-take suffered heavily in most of in the open market and remove their obligation to
the coal fields due to excessive rainfall in August- supply the sweetener at subsidised rates to ration
September 2011. shops. The Rangarajan Committee has recommended
33. (d) total decontrol of the sugar industry by doing away
34. (c) Primary sector-Agriculture, fishing, mining and with the levy sugar obligation, release mechanism and
quarrying freeing of export-import.
Secondary sector- Manufacturing and construction, 44. (a) The sharp decline in crude oil price helped the
Gas and water supply government to deregulate the price of diesel and thus
Tertiary sector- trade, transport etc, finance & real reduce a huge burden of subsidy on the exchequer.
estate, community and personnel services India if not a producing giant, is certainly a refining
35. (a) Government influences private sector expenditure by hub where it refines and markets around 220 metric
taxation, subsidies, macro economic policies and million tonnes of petroleum products. Out of this around
grants. 160 mmt is used for domestic consumption while the
36. (a) In the short run insurance premium are fixed costs rest is used for exports. Therefore, the drop in price of
because they are independent of the level of oil will be a blessing for the Indian refiners and the oil
production. marketing companies.
37. (a) Corporation Tax, Wealth Tax and Income Tax are in the 45. (c) Factors responsible for this are given below:
category of direct tax. 1. The boost to demand given by monetary and fiscal
38. (b) Effective Revenue Deficit is basically revenue deficit stimulus following the crisis was large. Final
excluding expenditure on capital generation form grants consumption grew at an average of over 8%
from the Centre to the states. It signifies the amount of annually between 2009-10 and 2011-12. The result
capital receipts that are being used for actual was strong inflation and a powerful monetary
consumption expenditure of the Government. It is a response that also slowed consumption demand.
new term introduced in the Union Budget 2011-12. It 2. Beginning in 2011-12 corporate and infrastructure
has now become a new fiscal parameter. investment started slowing both as a result of
39. (d) The government had selected three think tanks in investment bottlenecks as well as the tighter
March 2011 in order to estimate the quantum of black monetary policy.
money. These three think tanks are - National Institute 46. (a) The main functioning of the banking system is to
of Financial Management (NIFM), National Council for accept deposits and provide credit. The bank collects
Applied Economic Research (NCEAR) and National deposits from public. These are savings, fixed, current
Institute of Public Finance and Policy (NIPFP). and recurring deposits. The bank advances loan to the
40. (d) In respect to multi-brand retail trading, changes made business community and other members of the public.
in 2012 permitted up to 51 % FDI with prior government The types of bank loans and advances are overdraft,
approval. The foreign investor has to bring in a cash credits, loans and discounting of bill of exchange.
minimum investment of USD 100 million in an entity 47. (b) Inferior goods have a negative(less than 0) income
engaged in multi brand retail trading. Similar to the elasticity of demand meaning that demand falls as
requirement of mandatory local sourcing as applicable income rises.
in single brand product trading (prior to Cabinet 48. (a) Total fixed costs are constant, so the average fixed
meeting) at least 30% of the procurement of cost curve diminishes with the output. Thus, the average
manufactured/ processed products shall be sourced fixed cost curve is a rectangular hyperbola.
from `small industries`. The reach of retail sales outlets 49. (a) General equilibrium involving both production and
of foreign multi brand retail trader will be limited to consumption also ensures the achievement of pareto
only those cities with a population of 1 million (including efficiency. Pareto efficiency in this regard requires that
an area of 10 kilometres around the municipal/urban marginal rate of transformation should be equal to the
agglomeration limits of such cities). marginal rate of substitution of the individuals.
41. (c) As per amendment in Clause 141, the limit in respect of 50. (a) When marginal cost is less than average cost, average
maximum number of companies in which a person may cost must be falling. When marginal cost exceeds
be appointed as auditor has been proposed as twenty average cost must be rising. The marginal cost and
Economics C-207
average cost curves are related to each other. • No fixed jobs
51. (d) The production function of a firm will change whenever • Work in very poor working environment
input price changes. • No job regulation
52. (a) The government and the RBI have decided to launch • No security of Employment
one billion pieces of Rs 10 bank notes made of plastic • Employed for a limited period
on a field trial basis in 5 cities viz. Kochi, Mysore, Jaipur, 61. (c)
Bhubhaneswar and Shimla. Primary goal of introduction 62. (d) Generally, the income of a company falls under any of
of polymer notes is to increase its life. It could also the following 4 heads of income:
help in combating counterfeiting. RBI will embark on (1) Profits or gains from the business
polymer notes on a long term basis only if the cost- (2) Income from property, whether it is housing,
benefit calculus is decidedly positive in all dimensions. commercial, self-occupied or let-out. If the property
53. (d) Corporation Tax is imposed by State as well as Central is used in the company's business operations, it
Government. Corporation tax is imposed on the income does not fall under this head.
or capital of some types of legal entities. The taxes may (3) Capital gains
also be referred to as income tax. (4) Income from other sources including winnings from
54. (d) The variation in the value of money is always lotteries, races and interest on securities.
accompanied by opposite variation in the price of 63. (b) Nominal, authorized or registered capital means the sum
commodities and services. In brief, the value of money mentioned in the capital clause of Memorandum of
varies inversely with the price level. It is reciprocal of Association. It is the maximum amount which the
price level. company raises by issuing the shares and on which
Vm =1/p (where Vm denotes value of money and p the registration fee is paid. This limit cannot be
stands for price level). exceeded unless the Memorandum of Association is
55. (b) The effect of a government surplus upon the altered.
equilibrium level of NNP (Net National Product) is 64. (c) Inclusive growth is a phrase used in India for 11th
substantially the same as an increase in consumption. (2007-2012) and 12th (2012-2017) Five year plans.
56. (b) Committee to review the arrangements for institutional 65. (d) MONEX is associated with Monsoon Experiment. The
credit for agriculture and rural development Monsoon Experiment (MONEX) was the core of the
(CRAFICARD) under the Chairmanship of Shri B. Global Atmospheric Research Program (GARP)
Sivaraman, recommended the formation of National Monsoon subprogram, which was a major international
Bank for Agriculture and Rural Development effort to achieve a better understanding of the planetary
(NABARD). The bank came into existence on 12 July monsoon circulation.
1982. It is limited to the need of agriculture and rural 66. (a)
finance. 67. (b) The WBG came into formal existence on 27 December
57. (c) Share of food in total consumption expenditure has 1945 following international ratification of the Bretton
been coming down as per capita income grew over Woods agreements. The Group's headquarters are in
time in last sixty years because growth in food Washington, [Link] was created in 1944 to help Europe
expenditure has been lower than growth in per capita rebuild after World War [Link] mission is defined by two
income. goals - to end extreme poverty by 2030 and to boost
58. (b) The Competition Act, 2002 prohibits anti-competitive prosperity among the poorest 40 percent in low- and
agreements, abuse of dominant position by enterprises middle-income countries. The World Bank comprises
and regulates combinations (acquisition, acquiring of of five [Link] are :
control and Merger and acquisition), which causes or (1) International Bank for Reconstruction and
likely to cause an appreciable adverse effect on Development(IBRD),
competition within India. Competition Commission of (2) the International Development Association (IDA),
India was established on 14 October 2003 and became (3) the International Finance Corporation (IFC),
fully functional in May 2009. It is a body of the (4) the Multilateral Investment Guarantee Agency(MIGA)
Government of India responsible for enforcing the (5) International Centre for Settlement of Investment
Competition Act, 2002 throughout India and to prevent Disputes(ICSID).
activities that have an adverse effect on competition in 68. (a) The IMF is a UN's specialized agency. IMF was formed
India in 1944 at the Bretton Woods Conferenceto promote
59. (b) A company organized for commercial purposes is called international economic cooperation, international trade,
an enterprise. Classification of an enterprise into public employment, and exchange-rate stability, including by
or private sector is based on ownership of assets of making financial resources available to member
the enterprise. countries to meet balance-of-paymentsneeds.
60. (b) Unorganized workers (UW) in India have increased 69. (a) The World Trade Organization (WTO) is the only global
many folds post independence. Around 52% of UW's international organization dealing with the rules of trade
are engaged in agriculture & allied sector and they between nations. At its heart are the WTO agreements,
constitute more than 90% of the labour work force. negotiated and signed by the bulk of the world's trading
Characteristics of unorganized sector are: nations and ratified in their parliaments. The goal is to
• Excessive seasonality of employment help producers of goods and services, exporters and
• Poor working conditions importers conduct their business. The Uruguay Round
 208
C- Economics

led to the creation of the World Trade Organization, upward to the right
with GATT remaining as an integral part of the WTO y
agreements. The agreements fall into a simple structure
with six main parts, intellectual property (Agreement
on Trade-Related Aspects of Intellectual Property
Price
Rights (TRIPS)) was one of them.
70. (b) This report reviews the evolution of the Indian power
sector since the landmark Electricity Act of 2003, with a x
focus on distribution as key to the performance and Qty
viability of the sector. While all three segments of the 85. (b) Rise in the price of a commodity means both fall in the
power sector (generation, transmission, and value of currency and rise in the value of commodity.
distribution) are important revenues originate with the 86. (a) A flexible exchange rate system is a kind of a monetary
customer at distribution, so subpar performance there system which allows the exchange rate to be regulated
hurts the entire value chain. by supply and demand in relation to other currencies.
71. (b) When total product begins to decline, marginal product 87. (c) Industrial clusters development has an objective to
is negative. support the sustainability and growth of small and
72. (a) The way total output changes due to change in all medium enterprises in India. This scheme is governed
inputs in the same proportion is known as "law of and administered by the Ministry of micro, small and
return to scale". medium enterprises.
73. (d) 88. (c) The entry of Private investment in Indian agriculture
74. (c) Monopolistic competition is a form of market in which would be responsible for rising wages and tightening
there are large numbers of sellers of a particular labour market due to labour saving mechanism.
products but each seller sells somewhat differentiated 89. (b) Corporation tax in India is the major source of Gross
but close products. Tax Revenue (GTR) for the Government of India. It has
75. (a) The sum of a nation's gross domestic product (GDP) great tax collection in comparison to income tax, custom
plus net income received from overseas. Gross national duty and service tax.
income (GNI) is defined as the sum of value added by 90. (c) Pollution trends show inverse relationship with
all producers who are residents in a nation, plus any economic development. In early stage, pollution
product taxes (minus subsidies) not included in output, increases due to urbanization and industrialization. At
plus income received from abroad such as employee last, pollution declines due to structural changes
compensation and property income. towards service sector.
76. (d) 91. (b) Progressive tax structure means increase in tax rate
77. (a) Net National Product at factor Cost = National Product with increase in taxable amount. The word-progressive
at market prices – Indirect taxes + subsidies. denotes a progress from low to high.
78. (c) Absolute cost difference, comparative cost difference 92. (b) When monopoly is arisen due to climatic, environmental
and opportunity cost all form the basis of international and any natural factors in a particular area or in any
trade. country, known as Natural monopoly.
79. (d) Motor Vehicle tax is not a source of tax revenue for the Example of Natural monopolies include monopoly of
central government in India. South Africa on gold and diamond mining and oil
80. (d) Capital receipts and payments do not form part of production by Arabic nation.
93. (b) When different consumers pay different prices for the
current account of Balance of Payment.
same product, this situation is known as price
81. (d) Union Finance Ministry on 21 June 2014 accepted the
discrimination.
recommendations of Arvind Mayaram Committee on
94. (b) Public good means a commodity or service which is
rationalising the FDI/FPI definition. On NRI Investors,
given without profit to everyone in a society by
the Committee recommended treating non-repatriable
government or any organisation.
investment as domestic and exempting it from FDI 95. (a) Generally Kerosene is used as fuel by the poor, As
related conditions. they get prosperity, they use little this fuel.
82. (d) Marx was initially in the Young Hegelian camp and like 96. (a) Government strict measures to control food inflation
Feuerbach, rejected the spiritual basis. Marx believed and persistent decline in crude prices results in
that alienation is a systematic result of capitalism. declining trend in inflation during 2014-15.
Essentially, there is an "exploitation of men by men" 97. (c)
where the division of labour creates an economic 98. (b) The Fifth Five year plan (1974-79) had a high priority to
hierarchy. bring inflation under control and to achieve stability in
83. (d) The demand for a commodity at a given price is the the economic situation.
quantity that will be purchased at a unit of time and at 99. (c) The long-run Phillips curve is now seen as a vertical
a unit price. Demand has the following features; line at the natural rate of unemployment, where the rate
Demand refers to the quantity at a given price, Demand of inflation has no effect on unemployment.
must be defined per unit time. 100. (d) Near Money is a term used in economics to describe
84. (a) An exceptional demand curve is one that slopes highly liquid assets that can easily be converted into
Economics C-209

cash. 66% in 2014-15.

101. (b) Hedging is used in limiting or offsetting probability of 115. (d) Hot money is cash that investors from foreign countries
loss from fluctuations in the prices of commodities, will invest during the short term in search of the highest
currencies or securities. interest rate possible. With the opening up of debt and
102. (c) The Advance Reservation Period (ARP) for booking equity markets to foreign portfolio investors, the FPI
tickets in trains is 120 days. (Foreign Portfolio Investment) has emerged as the
103. (c) A progressive tax receives a larger percentage from the leading form of quick money flows globally.
income of higher earners than it acts from low income 116. (d) All three CRISIL,CARE and ICRA are credit rating
person. agencies
104. (b) Besides for the Wage Boards for journalists and non- 117. (c) Y. V. Reddy is the Chairman of Fourteenth Finance
journalists newspaper and new-agency employees Commission of India.
being Statutory Wage Board, all other wage boards are 118. (a) In 2011 Census, a person aged seven years and above
non-statutory in application. That is why who can both read and write in any language, is treated
recommendations made by these boards are out of as ‘literate’. In the Censuses prior to 1991, children
enforceable by the law. below five years of age were treated as illiterates, but
105. (a) Electricity is not public good but it is club good later, keeping in mind that the ability to read and write
including roads, bridges, gas, sewage, wires, telecom. with understanding is not generally achieved until one
106. (c) Transfer payment is a payment of money to individuals has time to develop these skills, the defining age for
by government without taking any goods or services. the literate category was raised to seven in the
Examples :- Censuses of 2001 and 2011.
· Un employment allowance 119. (c) Indian economist K. N. Raj drafted sections of India’s
· Social security payments first Five-Year Plan. Second Five-Year Plan (1956-61)
· Old age pension
was drafted by scientist and statistician P.C.
· Student grant
Mahalanobis, and mainly focused on heavy industries
· Subsidies to farmers, exporters & manufacturer.
and transportation, particularly in the public sector.
107. (d) When the re-organisation of production is not possible
120. (c) Government receipts which create liability or reduce
which can make any one better off with out making
assets is called capital receipts and the receipts which
someone else worse off then efficiency occurs. Pareto
Efficiency, pareto Optimality and Allocative Efficiency neither create liability nor reduce assets of Government
are all the same and indicates "efficiency in resource are called revenue receipts. Corporate tax receipt,
allocation". dividends and profits and interest receipt are revenue
108. (c) The Economic and Social Commission for Asia and the receipts (increase income), but disinvestment receipt
Pacific (ESCAP) is the regional development arm of the is capital receipt (reduces asset).
United Nations for the Asia-Pacific region. It is a 121. (b) The Agreement on Trade-Related Aspects of
conglomerate of 53 Member States and 9 Associate Intellectual Property Rights (TRIPS) is an international
Members. The headquarters of ESCAP is in Bangkok. legal agreement between the members of the World
109. (c) A bank run occurs when a large number of customers Trade Organization regarding setting standards for
of a bank or another financial institution withdraw their the regulation of intellectual property by national
deposits simultaneously due to concerns about the governments. It has 162 member nations and became
bank's solvency. The panic situation arises when effective on January 1, 1995.
depositors withdraw their part fearing that the bank 122. (d) Real GDP or Gross Domestic Product (GDP) growth of
will be unable to repay their deposits in full and on India at constant prices in the year 2015-16 is estimated
time, at 7.56 percent in comparison to the growth rate of
110. (c) If an economy is under inflationary pressure the most 7.24 percent in 2014-15. Real Gross Value Added growth
likely effects include the depreciation of domestic at basic constant prices in 2015-16 is 7.3 per cent. Gross
currencies and the cost of borrowing also decreases. National Product is the total value of goods produced
111. (a) Full employment is the employment level at which every and services provided by a country during a year.
individual who desires to work at the existing wage 123. (b) The Trans-Pacific Partnership (TPP) is a trade
rate gets employed. If the condition of unemployment agreement between 12 Pacific Rim nations including
occurs, it is a temporary/abnormal condition in the Australia, Brunei, Canada, Chile, Japan, Malaysia,
economy. Mexico, New Zealand, Peru, Singapore, the United
112. (d) Capital Deepening is the process of increasing the States (until January 23, 2017) and Vietnam. These
amount of capital per worker. members account for 40 percent of global GDP. India
113. (c) The purpose of the National Investment Fund (NIF) is is not a member of the TPP.
related to disinvestment proceedings of central public 124. (b) Bitcoin is a digital currency and was invented on
sector enterprises and to invest the same to generate
October 31, 2008 by an unidentified programmer, or
earnings without depleting the corpus.
group of programmers called Satoshi Nakamoto. It uses
National Investment and Infrastructure Fund (NIIF) is
complex computer software for its generation called
a fund created by the Government of India for
enhancing infrastructure financing in the country. Bitcoin mining. Reserve Bank of India (RBI) does not
114. (b) The contribution of Services Sector of India to overall allow the use of Bitcoins, and warned those investing
GDP has increased sharply, from 41% in 1990-91 to in it.
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C- Economics

125. (c) In 2016, the Union Government of India announced a 05 to 2011-12. The base year of national accounts was
Rs. 6,000 crore special package for the textile and last revised in January 2010.
apparel industry to create one crore jobs, mostly for 136. (a) A-1,B-2,C-3 and D-4 is the correct answer.
women, in the next three years. The package included 137. (c) Geoffrey Kay has given the famous dictum- ‘capital
several tax and production incentives. The government created underdevelopment not because it exploited the
also planned to bring in more flexibility in labor laws underdeveloped world, but because it did not exploit
to increase productivity. it enough.’
126. (a) 12th Five Year Plan (2012 - 2017) aimed at achieving 138. (a) An exclusive economic zone (EEZ) is a sea zone
growth rate of 8% by focusing on inclusive growth. prescribed by the United Nations Convention on the
The government aimed reducing poverty by 10 per Law of the Sea over which a state has special rights
cent during the plan. Skill Development Strategies regarding the exploration and use of marine resources,
needed for increasing employment. Promoting regional including energy production from water and wind. It
balances will promote equal economic growth of all stretches from the baseline out to 200 nautical miles
states. (nmi) from its coast. The term does not include either
127. (a) Most-favoured-nation (MFN) Clause under the WTO the territorial sea or the continental shelf beyond the
regime ensured that countries should not discriminate 200 nmi limit.
between their trading nations and also that national 139. (c) An ETF, or exchange-traded fund, is a marketable
and international business entities get equal treatment. security that tracks an index, a commodity, bonds, or a
The clause forms the first article of the General basket of assets like an index fund.
Agreement on Tariffs and Trade (GATT). Reducing
140. (d) The Reserve Bank of India has constituted a 10-
tariffs and non-tariff barriers is also highlighted by
member 'High Level Task Force on Public Credit
the clause.
Registry (PCR) for India', which is headed by YM
128. (a) GST would be applied at each stage of sale/purchace
Deosthalee, ex-CMD, L&T Finance Holdings.
of goods services, according to value added.
129. (a) Changes in Foreign Direct Investment (FDI) policy 141. (a) India Post Payments Bank is incorporated as a Public
affected single brand trading, defense, and private Sector Bank under the Department of Posts with 100%
security sectors, manufacturing of small arms, GOI equity. IPPB was launched on January 30th, 2017
pharmaceuticals. Eight year relaxation for single brand in Ranchi and Raipur with the objective of being
retail is proposed, FDI limit for defense sector has been present in all corners of India by the end of the year.
made applicable for small arms, and FDI limit is raised 142. (a) Growth in production (in percent) of natural gas
to 74% for private security agency. industries in India during the period 2015 - 2016 was
130. (d) Brexit refers to Great Britain’s expected withdrawal from negative. Production of refinery products, crude oil,
the European Union (EU). A referendum was held on natural gas, steel and cement dwindled in the period
23 June 2016, in which 52% of votes were in favor of whereas fertilisers, coal and cement reported healthy
leaving the EU. UK’s economy was expected to be output numbers. Electricity had no fluctuation from
affected by the Brexit vote. last year.
131. (a) Mahalanobis model in India occurred as an analytical 143. (a) The Society for Worldwide Interbank Financial
framework for India’s Second Five Year Plan in 1955. Telecommunication (SWIFT) was founded in Brussels
The duration of plan holiday was from 1966 to 1969. in 1973 under the leadership of its inaugural CEO, Carl
The main reason behind the plan holiday was the Indo- Reuterskiöld , and was supported by 239 banks in
Pakistan war & failure of third plan. During this plan fifteen countries. It started to establish common
annual plans were made and equal priority was given standards for financial transactions and a shared data
to agriculture its allied sectors and the industry sector. processing system and worldwide communications
Rolling Plan was started with an annual plan for 1978- network designed by Logica and developed by The
79 and as a continuation of the terminated fifth year Burroughs Corporation. Fundamental operating
plan. procedures, rules for liability, etc., were established in
132. (a) Monitory policy in India uses 7 tools viz. cash reserve 1975 and the first message was sent in 1977. SWIFT's
ratio, statutory liquidity ratio, repo and reserve repo first United States operating center was inaugurated
rates, bank rate, marginal standing funding and open by Governor John N. Dalton of Virginia in 1979.
market operations. 144. (c) The tax incidence depends on the relative price
133. (a) Devaluation of currency will be more beneficial if prices elasticity of supply and demand. When supply is more
of domestic goods remains constant. elastic than demand, buyers bear most of the tax burden.
134. (b) GCI scores are calculated on basis of 12 categories When demand is more elastic than supply, producers
called ‘pillars of competitiveness which covers both
bear most of the cost of the tax. Tax revenue is larger
business and social indicators. It includes pillars such
the more inelastic the demand and supply are.
as institutions, infrastructure, health and primary
education, labour market efficiency, financial market 145. (b) The law of diminishing marginal utility states that as a
development, technological readiness and market size. person increases consumption of a product while
135. (d) In January 2015, the Ministry of Statistics & keeping consumption of other products constant, there
Programme Implementation has released the new series is a decline in the marginal utility that person derives
of national accounts, revising the base year from 2004- from consuming each additional unit of that product.