Indian Economy MCQs
1. Which of the following schemes have been subsumed in the recently approved Ayushman Bharat – National Health Protection Mission (AB-NHPM)?
[A] Rashtriya Swasthya Bima Yojana (RSBY)
[B] Senior Citizen Health Insurance Scheme (SCHIS)
[C] National Life Insurance Scheme
[D] 1 & 2
Show Answer
Correct Answer: D [ 1 & 2 ]
Notes:
Ayushman Bharat -National Health Protection Mission (AB-NHPM) is a centrally sponsored scheme under Ayushman Bharat Mission. The scheme will provide insurance cover of Rs. 5 Lakh per family per year. The scheme will benefit more than 10 crore families belonging to poor and vulnerable population. AB-NHPM will subsume the on-going centrally sponsored schemes –Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS).
2. Which of the following is used to denote broad money?
[A] M1
[B] M2
[C] M3
[D] M4
Show Answer
Correct Answer: C [M3]
Notes:
Narrow Money M1 = Currency with the public + Demand Deposits of public in Banks When a third component viz. Post office Savings Deposits is also added to M1, it becomes M2. M2 = M1 + Post Office Savings.
Broad Money M3 = Narrow money + Time Deposits of public with banks
3. Which among the following is NOT a subsidiary of RBI?
[A] National Housing Bank
[B] NABARD
[C] Bharatiya Reserve Bank Note Mudran Private Limited
[D] SIDBI
Show Answer
Correct Answer: D [SIDBI ]
Notes:
RBI has four subsidiaries viz. Deposit Insurance and Credit Guarantee Corporation, DICGC; National Housing Bank; Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) and NABARD.
4. Which among the following is a qualitative tool of monetary policy?
[A] Bank Rate
[B] Credit Ceiling
[C] Credit rationing
[D] Cash Reserve Ratio
Show Answer
Correct Answer: C [Credit rationing ]
Notes:
The quantitative instruments are Open Market Operations, Liquidity Adjustment Facility (Repo and Reverse Repo), Marginal Standing Facility, SLR, CRR, Bank Rate, Credit Ceiling etc.
On the other hand, qualitative instruments are: credit rationing, moral suasion and direct action (by RBI on banks).
5. Which among the following closest instrument to Gold ETF?
[A] Debenture
[B] G-Sec security
[C] Mutual Fund
[D] Commercial Paper
Show Answer
Correct Answer: C [Mutual Fund ]
Notes:
Gold ETFs (Paper Gold) are mutual fund schemes that invest in standard gold bullion (of 99.5% purity). The value of an ETF is based on price of gold. These are alternative to owning physical gold.
6. Which among the following is NOT a pillar of Basel III?
[A] Minimum capital standards
[B] Supervisory review
[C] Market discipline
[D] Consolidation of assets
Show Answer
Correct Answer: D [Consolidation of assets ]
Notes:
The Basel III framework is based on 3 components called 3 pillars, which include:
Pillar 1 : Minimum capital standards,
Pillar 2 : Supervisory review and
Pillar 3 : Market discipline.
7. What term is used for maximum capital which the company can raise in its life time?
[A] Authorized Capital
[B] Registered Capital
[C] Nominal Capital
[D] All of them
Show Answer
Correct Answer: D [All of them ]
8. Which among the following was the first bank purely managed by Indians?
[A] Oudh Commercial Bank
[B] Punjab National Bank
[C] Bank of India
[D] Allahabad bank
Show Answer
Correct Answer: B [Punjab National Bank ]
Notes:
The first Bank with Limited Liability to be managed by Indian Board was Oudh Commercial Bank. It was established in 1881 at Faizabad. This bank failed in 1958. The first bank purely managed by Indians was Punjab National Bank, established in Lahore in 1895
9. Inflation Indexed Bonds is pegged to ___?
[A] WPI
[B] CPI
[C] Both WPI and CPI
[D] None of the above
Show Answer
10. Which of the following best defines a floating-rate bond?
[A] A bond with a fixed interest rate and has better yield than varying interest rate bond
[B] A bond with a fixed interest rate and has lower yield than varying interest rate bond
[C] A bond with a varying interest rate and has better yield than fixed interest rate bond
[D] A bond with a varying interest rate and has lower yield than fixed interest rate bond
Show Answer
Correct Answer: B [A bond with a fixed interest rate and has lower yield than varying interest rate bond]
Notes:
Floating rate bonds have variable interest rate and protect investors against a rise in interest rates (which have an inverse relationship with bond prices). They also carry lower yields than fixed notes of the same maturity.
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