S.Y B.COM
SEMESTER - 4
MACRO ECONOMIC ISSUES AND POLICIES
(MEIP)
MCQS - FEBRUARY 2020
1. One of the following is not the objectives of fiscal policy.
A. Equality of income distribution
B. High economic growth
C. Price stability
D. Exchange rate stability
2. Read the following statements and choose the correct option.
I. Currency coins and produced and circulated by the government of India.
ll. Currency coins are produced by the government of India and circulated by RBI
A. I is true and II is not true
B. I is not true and II is not false
C. I is false and II is not true
D. I is not false and II is false
3. Which of the following is correct with reference to the money supply in India?
I. The share of currency in circulation is highest in the money supply
II. The share of bank money is highest in the money Supply
III. CRR and credit money are inversely related
A. II and III
B. I and II
C. I and III
C. I, II and III
4. The bank rate policy will be effective if there is _________
A. Efficient banking system
B. Favorable economic environment
C. Cordial relationship between banks and the RBI
D. All of the above
5. Over dependence on borrowing to meet the deficit financing may lead a country to.....
A. Debt Trap
B. Revenue Trap
C. Deficit Trap
D. Financial Trap
6. Following statements are true about Government expenditures.
I. Government expenditures are autonomous in nature and independent in character
II. Government expenditure are induced in a nature and dependent upon level of income
III. Irrespective of nature of investment, government expenditure are injections into the economy
A. II and III
B. I and II
C. I and III
D. I, II and III
7. One of the following is not a type of budget deficit
A. Primary deficit
B. Overhead deficit
C. Fiscal deficit
D. Revenue deficit
8. Which of the following is/are the source of money supply in India?
A. Commercial Banks
B. RBI
C. Government of India
D. All of the above
9. According to Keynes the following statement/s are true
I. Transaction Demand and Precautionary Demand are known and already determined.
II. The precautionary demand for money is volatile in nature.
III. If the interest rate is expected to increase, the speculators would hold more idle cash.
IV. Interest rate and bond prices are directly related.
A. I, II, III
B. I, II, IV
C. I, II, III, IV
D. I, III, IV
10. In order to understand the burden of public borrowings ________.
A. Rely upon government borrowing data
B. We should talk to World Bank and IMF
C. Understand government expenditure
D. Classify borrowing into internal and external segments
11. One of the following is not a source of non tax revenue of government.
A. Divident of the company
B. Profit of public sector units
C. Custom duties
D. External grants
12. If the initial deposit is Rs. 50000 and CRR is 30%, find out the credit multiplier.
A. 2.60
B. 2.25
C. 2
D. 2.33
13. Fisher's equation of quantity theory is __________.
A. Related to wealth of wealth holders
B. Based on liquidity preference
C. Related to aggregate savings of society
D. A mathematical truism
14. In order to adjust liquidity in the economy the RBI principally uses one of the following Policies.
A. Income policy
B. Selective credit control policy
C. Repo rate policy
D. Fiscal policy
15. The commercial banks rush to purchase new securities and treasury bills because
A. Banks wants to invest in low Income yielding securities
B. Securities can enhance capital adequacy norms
C. Securities are not always available
D. Banks will have to comply upon statutory requirements
16, The formula to calculate the credit multiplier (Cm ) is....
B. Cm = ( ∆TD - ∆R) / ∆R
C. Cm = ∆CC / ∆R
D. All of the above
17. Which of the following statements are not false with reference to the store of value function of money?
I. Production and consumption of goods and services are not instantaneous.
II. Certainty of life
III. Accumulative nature of people
IV. Uncertainty of life
A. I,II and III
B. II, III and IV
C. I, II and IV
D. I, III and IV
18. One of the following is not the function of money?
A. Medium of exchange
B. Store of value
C. Difference of payment
D. Measure of Value
19. Match the following
|
I. Stanley Withers |
a. Conventional approach to money |
|
II. Milton Friedman |
b. Chicago approach to money |
|
II. Gurley and Shaw |
c. Weighted sum approach to money |
|
IV. Radcliffe Committee |
d. Central bank approach to money |
A. (I - a) (II - c) (III - b) (IV - d)
B. (I - a) (II - b) (III - c) (IV - d)
C. (I - b) (II - a) (III - d) (IV - c)
D. (I - b) (II - a) (III - c) (IV - d)
20. Which of the following are the basic limitations of the commodity money?
I. Heterogeneity
II. Non divisibility
III. Enforceability
IV. Difficult to store
A. I, II And IV
B. I, III AND IV
C. II, III and IV
D. I, II and III
21. As an objective of monetary policy, price stability is contradictory to the objective of
A. Reduction of unemployment
B. Removal of poverty
C. Equity of income distribution
D. Exchange rate stability
22. Velocity of circulation of money refers to _________.
A. Circulation of money between bank and people
B. Average number of times an unit of currency changes hands
C. Rate of change in currency against deposit
D. Circulation of money among people
23. One of the following method is used by the RBI to control the flow of credit in the economy towards desirable channels.
A. Variable reserve ratio
B. Margin requirements
C. Open market operation
D. Bank rate policy
24. Bank rate policy will fail if there are _________.
A. Integrated financial system
B. Elastic interest rates
C. Alternative sources of Borrowing available
D. Conducive economic environment
25. According to Chakravarty Committee, Which of the following is the main objective of Monetary Policy?
A. Equitable Distribution of National income
B. Increasing Employment Opportunities
C. Price Stabilization
D. Economics Growth
26. Weighted Index number is superior to simple index number because ________.
A. Weights are assigned as per importance of commodities.
B. Weights are assigned as per choice
C. Weights are arbitrary to the extent of madness
D. Weights are generally uniform in nature
27. Which of the following statements is/are true?
I. Increase in REPO rate leads to increase in money supply.
II. Increase in REPO rate leads to decrease in money Supply.
III. Increase in REPO rate leads to increase in interest rate.
IV. Increase in REPO rate represent the tight money policy.
A. II, III and IV
B. I and II
C. I and III
D. I, II and III
28. The credit creation by the commercial banks directly depends on ________.
A. Primary Deposits and CRR
B. Other Deposits with RBI and CRR
C. Other Deposits with RBI and Bank rate
D. Primary Deposits and Bank Rate
29. To produce new currency , RBI adopted _________ reserve system in the year __________.
A. proportionate, 1956
B. minimum, 1957
C. minimum, 1956
D. proportionate, 1957
30. If we deduct the interest component from fiscal deficit we will obtain
A. Primary deficit
B. Revenue deficit
C. Fiscal deficit
D. Budget deficit
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