Quiz on Economics

Most Important Questions from Economics

1. Who has been appointed as the Chairman of the 7th central pay Commission constituted by the Government of Indian in February 2014?

A. Justice B.K Singh                       B. Justice Ashok kumar Mathur
C. Justice Swantanter Kumar          D. Justice Mridula Singh

Correct Ans: B

Description: In a resolution dated 28th February 2014, Government of India has appointed the Seventh Central Pay Commission comprising Justice Shri Ashok kumar Mathur as Chairman, Shri Vivek Rae as full-time Member, Dr. Ratin Roy as part-time Member and smt. Meena Agarwal as Secretary. The commission is in Delhi from the date of its constitution has been given 18 months to make its recommendations.


2. India exports power to ____________.

A. Bangladesh                            B. Pakistan
C. Myanmar                               D. Bhutan

Correct Ans: C

Discription: India is stepping up its development cooperation in light of Myanmar's continuing reform process and its age-old interconnectedness.


3. As per the prediction of annual economic report of United Nations, the global economy will grow by more than ___ in 2015 and 2016.

A. 3%              B. 9%
C.11%             D. 1.5%

Correct Ans: A

Discription: The downward revision reflects mainly deterioration in the prospects of the economies in transition and several large developing countries, especially in South America. In 2016, global growth is forecast to improve to 3.1 percent, which is still well below the pre-crisis pace.


4. The degree of monopoly power is to be measured in terms of the firm's

A. normal profit                                           B.Supernormal profit
C. both normal and supernormal profit        D. Selling price

Correct Ans: B

Discription: Supernormal profit is also called economic profit, and abnormal profit, and is earned when total revenue is greater than the total costs. Total costs include a reward to all the factors, including the normal profit.

5. Which one of the following settlement was comprised of Zamindar as the middleman to collect the land revenue?

A. Mahalwari Settlement                 B. Permanent Settlement
C. Ryotwari Settlement                    D. None of these

Correct Ans: C

Discription: The Ryotwari system was one of the two main systems used to collect revenues from the cultivators of agricultural land. These revenues included undifferentiated land taxes and rents, collected simultaneously. Where the land revenue was imposed directly on the ryots.

The System of assessment was known as ryotwari. Where the land revenue was imposed indirectly through agreements made with Zamindars the system of assessment was known as Zamindari.


6. Taxes are as certain as the death, because

A. They constitute the major source of government revenue.
B. The Government has no other source of revenue.
C. Most PSUs are run inefficiently.
D. The Government has its own budget constraints.

Correct Ans: A

Description: A tax is a financial charge or other levy imposed upon a taxpayer by a state or the functional equivalent of a state to fund various public expenditures. A failure to pay, or evasion of or resistance to taxation, is usually punishable by law.


7. When central bank buys securities, bank reserves:

A. Has no impact on reserves             B. exchange
C. Contracts                                        D. Unhanged

Correct Ans: A

Description: Through open market operations, a central bank influences the money supply in an economy. Each time it buys securities (Such as a government bond or treasury bill), it in effect creates money. The central bank exchange money for the security, increasing the money supply while lowering the supply of the specific security. Conversely, selling of securities by the central bank reduces the money supply.


8. Take of stage in an economy means

A. Steady growth begins.                     B. The Economy is stagnant.
C. The Economy is about to collapse.  D. All control are removed.

Correct Ans: A

Description: The Concept of Steady state growth is the counterpart of long-run equilibrium in static theroy. It is consistent with the concept of equilibrium growth. In steady state growth all variables, such as output, population, capital stock, saving, investment, and technical progress, either grow at the constant exponential rate or are constant.



Related Article:-

• 
  Unemployment
  There are three main types of unemployment:
  
  1. Cyclical
  2. frictional
  3. Structural
  
  Cyclical unemployment occurs because of the ups and downs of the economy over time.
  When the economy enters a recession, many of the jobs lost are considered cyclical unemployment.
  Strctural unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
  Strctural unemployment is often brought about by technological changes that make the job skills of many of today's workers obsolete, and can be addressed by either providing better information to workers who are structurally unemployed or by retraining these workers to fill new jobs that are in higher demand in the economy.
  
  For example, in the 1970s automobile assembly lines employed people to make welds on vars being produced. When automation replaced those workers with robots in the 1980s, there was no longer the same demand for welders among manufacturers in the automobile producing states.
  
  However, at the same time, there was a strong demand for welders in other sectors of the economy (such as the oil industry) and in other parts of the country (such as Alaska and the oil Patch states). If welders laid off in the auto industry were informed of these job opportunities (and were sufficiently mobile) they could find employment and would no longer be unemployed.

• Money Bill and Finance Bill

  
  Every bill which has provisions related to financial matters is a Financial Bill. There are three kinds of Financial Bills in Indian parliament Viz.
  1. Money Bills
  2. Financial Bills category-I
  3. Financial Bills category-II
  
  

  This simply imples that all money bill are financial bills, but all financila bills are not money bills.

  Article 110 defines the Money bill.
  
  A bill is considered as a money bill if it contains only provisions dealing with all or any of the following matters: sub clausses of article 110 clause(1)
  
  
  # Imposition, abolition, remission, alteration, regulation of any tax
  
  # The regulation of the borrowing of money or the giving of any guarantee by the Government of India, or the amendment of the law with respect to any financial obligations undertaken or to be undertaken by the Government of India;
  
  # The custody of the consolidated Fund or the Contingency Fund of India, the Payment of moneys into or the withdrawal of moneys form any such Fund;
  
  # The appropriation of moneys out of the Consolidated Fund of India;
  
  # The declaring of any expenditure to be expenditure charged on the Consolidated Fund of India or the increasing of the amount of any such expenditure;
  
  # The receipt of money on account of the Consolidated Fund on India or the Public account of India or the custody or issue of such money or the audit of the accounts of the Union or of a State; or
  
  # Any matter incidental to any of the matters specified in sub-clauses (a) to (f).
  
  
  When a Bill is not a money Bill?
  
  Bill shall not be deemed to be a Money Bill by reason only that it provides for the imposition of fines or other pecuniary penalties or for the demand or payment of fees for licenses or fees for service rendered, or by reason that it provides for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
  
  
  When decides whether a Bill is Money Bill or not?
  
  If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the House of the People thereon shall be final. The speaker of the house provides certificate signed by him that a bill is Money bill. The certificate of the speaker if final and cannot be challenged in any court of law.
  
  

  What is a Finance Bill?

  
  A finance bill is also a Money bill. The Finance bill is one of the documents presented with the budget or annual Financial Statement as mandated in Article 110 (a).
  
  

  This article says: The imposition, abolition, remission, alteration or regulation of any tax.

  
  

  Finance Bill & Budget Documents

  
  The main Budget documents are presented to the parliament accordingly various articles of our constitution as follows:
  
  1.Annual Financial Statement (AFS): As per Article 112
  2.Demand for Grants (DG): As per Article 113
  3.Appropriation Bill: As per Article 114(3)
  4.Finance Bill: As per Article 110(a)
  
  The following are presented as mandated in Fiscal Responsibility and Budget Management Act 2003.
  
  Memorandum Explaining the Provisions in the Finance Bill, Macroeconomic framework for the relevant financial year Fiscal Policy Strategy Statement for the financial year Medium Term Fiscal Policy Statement.

• Difference between Money Bill and Finance Bill

  
  

  # A money bill deals with any of the matters specified above as article 110(a) to Article 110(g). However the Finance Bill is just concerned about article 110(a). The structure of the finance bill presented with the documents has the following heads supported by schedules, statement of objects and reasons and notes on clauses:
  
  Rates on Income Tax
  Income Tax
  Wealth Tax
  Customs
  Excise Service Tax
  Central Sales Tax
  Clean Energy Cess
  
  

  Miscellaneous

  
  # All of the above are within the purview of article 110(a). In simple language a money bill may have other provisions also. Like Money Bills, they can be introduced only in Lok Sabha on the recommendation of the President.
  
  # Other than the one restriction that Money Bills can be introduced in Lok Sabha only, does not apply to the Finance Bills.
  
  # This means the Finance Bills can be referred t a joint Committee of the Houses while money bills can not. This also means that provisions of article 108 regarding joint sitting of both Houses do not apply to a Money Bill. This also means that a finance bill can effectively rejected by the Rajya Sabha whereas money bill cannot.
  
  # Finance Bill is a bill introduced in Lok Sabha every year immediately after the presentation of the general Budget to give effect to the financial proposals of the Government of India for the following financial year. Finance Bills are treated as Money Bills as they substantially deal with amendments t various tax laws. However Article 117(3) says that those bills which contain provisions of involvement from the consolidated fund of India are Finance bill and can be introduced in either House of Parliament. However,
  
  # Finance Bills are treated as Money Bills as they substantially deal with amendments to various tax laws. However Article 117(3) says that those bills which contain provisions of involvement form the consolidated fund of India are Finance bill can be introduced in either House of Parliament. However, the recommendation of the President is essential for consideration of these Bills by either House and unless such recommendation is received, neither House can pass the Bill.

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