41. Under what circumstances is the sale of branded goods common?
[A] excess capacity
[B] monopolistic competition
[C] monopoly
[D] pure competition
Show Answer
Correct Answer: B [monopolistic competition]
Notes:
Monopolistic competition is a type of imperfect competition in which many producers sell products that are different from each other and therefore are not perfect substitutes. Monopolistic competition includes the restaurant, cereal, clothing, footwear and service industries in large cities.
42. __ of an input is defined as the change in output per unit of change in input when all other inputs are constant.
[A] Marginal product
[B] Production function
[C] Total product
[D] Average product
Show Answer
Correct Answer: D [Average product]
Notes:
Average product is the total product or output divided by the number of input units. In contrast, marginal product is the change in output that occurs when one more unit of input is added.
43. Which one of the following is not a qualitative control of credit by the Central Bank of a country?
[A] Rationing of credit
[B] Variation of margin requierments
[C] Regulation of margin requirements
[D] Regulation of consumer credit
Show Answer
Correct Answer: B [Variation of margin requierments]
Notes:
Qualitative loans (used for select purposes by RBI) are: margin requirements, consumer credit regulation, RBI guidelines, rationing of credit, ethical appeals and direct action. The quantitative credit measures governing the total amount of loans are: bank rate policy, open market operations, cash reserve ratio and statutory liquidity ratio.
44. State financial corporations have mainly assisted to develop ___________?
[A] agriculture farms
[B] cottage industries
[C] medium and small-scale industries
[D] large scale industries
Show Answer
Correct Answer: C [ medium and small-scale industries
]
Notes:
State Financial Corporations (SFCs) are the state-level financial institutions which play a vital role in the growth of small and medium enterprises in the concerned state. Besides, SFCs are helpful in ensuring balanced regional development, higher investment, more employment generation and broad ownership of industries.
45. In the context of capital markets, what does the abbreviation ‘FPO’ stand for?
[A] Free Public Offer
[B] First Portfolio Operation
[C] Follow-on Public Offer
[D] First Public Offer
Show Answer
Correct Answer: C [Follow-on Public Offer]
Notes:
A follow-on offering is issuance of additional shares made by a company after an initial public offering (IPO). Companies usually announce FPOs to raise equity or reduce debt. The two main types of FPOs are dilutive (meaning new shares are added) and non-dilutive
46. When was the priority given in the second plan?
[A] Agriculture
[B] Services
[C] Heavy Industry
[D] Foreign Trade
Show Answer
Correct Answer: C [Heavy Industry]
Notes:
The Second Plan (1956-1961) was focused on the development of India by establishing heavy industries under the public sector. The total money allotted for this 5-year plan was 48 Billion rupees. The plan was based on the Mahalanobis model of economic development.
47. Which of the following is included in the calculation of national income?
[A] Services of housewives
[B] Pensions
[C] Income of smugglers
[D] Income of watchmen
Show Answer
Correct Answer: D [Income of watchmen]
Notes:
National Income is defined as the sum total of all the goods and services produced in a country, in a particular period of time. This is the true net National income or Revenue of the country or the national dividend.” So the income of watchmen will be included while computing it.
48. What is the removal of barriers or restrictions set by the government called?
[A] Industrialization
[B] Globalization
[C] Modernization
[D] Liberalisation
Show Answer
Correct Answer: D [Liberalisation]
Notes:
Liberalisation refers to removing barriers or restrictions set by the government. Governments can use trade barriers to increase/decrease foreign trade and to decide what kinds of goods and how much of each should come into the country. Trade barriers aim to protect the domestic producers from foreign competition.
49. Development of a country can generally be determined by:
[A] Its per capita income.
[B] Its average literacy level.
[C] Health status of its people.
[D] All of the above
Show Answer
Correct Answer: D [All of the above ]
Notes:
All the given factors determine the development of a country. The development of a country is generally determined by its per capita income, its average literacy level and health status of the people in the country. Development of the country is a broad term that develops the per capita income, and living standard of the people.
50. Which of the following is correct with reference to ‘micro-credit programmes’?
[A] It is a programme developed by Regional Rural banks to provide credit to village Panchayats.
[B] Micro credit programmes refer to financial products specially designed for MSMEs.
[C] It is credit linked financial empowerment of Self-Help Groups (SHGs).
[D] None of the above
Show Answer
Correct Answer: C [It is credit linked financial empowerment of Self-Help Groups (SHGs).]
Notes:
Microcredit is used to describe small loans granted to low income individuals that are excluded from the traditional banking system. It is part of the larger microfinance industry, which provides not only credit, but also savings, insurance, and other basic financial services to the poor. By March end 2003, more than seven lakh SHGs had reportedly been credit linked. Such credit provisions are generally referred to as micro-credit programmes. SHGs have helped in the empowerment of women.
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