MCQOPTIONS
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MCQOPTIONS
This section includes 200 Mcqs, each offering curated multiple-choice questions to sharpen your Economics (CBCS) knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
The biggest trading partner of India is |
| A. | USA |
| B. | UAE |
| C. | China |
| D. | Saudi Arabia |
| Answer» D. Saudi Arabia | |
| 52. |
To make the exchange rate more realistic and to encourage exports and discourage imports, the Rupee was devalued in |
| A. | 1991 |
| B. | 1992 |
| C. | 1996 |
| D. | 1998 |
| Answer» B. 1992 | |
| 53. |
Foreign investment inflows help to mitigate the pressure on the overall |
| A. | Balance of Trade |
| B. | Balance of Payments |
| C. | International trade |
| D. | Fiscal deficit |
| Answer» C. International trade | |
| 54. |
The trade deficit India experienced in 1990-91 was mainly due to |
| A. | High growth rate of exports |
| B. | High growth rate of imports |
| C. | High growth rate of population |
| D. | None of the above |
| Answer» C. High growth rate of population | |
| 55. |
Under Liberalized Exchange Rate Management Scheme, how much is the receipts on current account could be converted freely into rupees at market determined exchange rate? |
| A. | 30 % |
| B. | 40 % |
| C. | 50 % |
| D. | 60 % |
| Answer» E. | |
| 56. |
The terms of trade measures |
| A. | The terms of exchange between a unit of import and a unit of export |
| B. | The terms of exchange between a unit of one currency with a unit of other currencies |
| C. | The terms of exchange between a unit of one s commodity with a unit of other commodities |
| D. | None of the above |
| Answer» B. The terms of exchange between a unit of one currency with a unit of other currencies | |
| 57. |
Capital account includes |
| A. | Invisible export |
| B. | Long-term capital transaction |
| C. | Invisible import |
| D. | All of the above |
| Answer» E. | |
| 58. |
Rupee was made convertible for all trade in merchandise in |
| A. | March 1991 |
| B. | March 1992 |
| C. | March 1993 |
| D. | March 1994 |
| Answer» D. March 1994 | |
| 59. |
Rupee is non-convertible in |
| A. | Current account |
| B. | Capital account |
| C. | Both (a) and (b |
| D. | None of the above |
| Answer» C. Both (a) and (b | |
| 60. |
Balance of trade includes |
| A. | Visible items |
| B. | Invisible items |
| C. | Both visible and invisible items |
| D. | None of the above |
| Answer» B. Invisible items | |
| 61. |
A country which gives loans and grants on a large scale to other countries has |
| A. | A surplus in its BOP on capital account |
| B. | A deficit in its BOP on capital account |
| C. | A surplus in its BOP on current account |
| D. | A deficit in its BOP on its current account |
| Answer» C. A surplus in its BOP on current account | |
| 62. |
twin deficits refer to revenue deficit and |
| A. | Capital deficit |
| B. | Capital account BoP deficit |
| C. | Current account BoP deficit |
| D. | None of the above |
| Answer» D. None of the above | |
| 63. |
Measurement of deficit or surplus in the balance of payments in in international transaction is in a given year is |
| A. | Balance of payments |
| B. | Balance of trade |
| C. | Transfer payments to foreigners |
| D. | None of the above |
| Answer» B. Balance of trade | |
| 64. |
A systematic record of receipts and payments in international transactions of a country in a given year is called |
| A. | Balance of trade |
| B. | Balance of payments |
| C. | Terms of trade |
| D. | Capital account |
| Answer» C. Terms of trade | |
| 65. |
Devaluation encourage |
| A. | Exports |
| B. | Imports |
| C. | Both exports and imports |
| D. | None of the above |
| Answer» B. Imports | |
| 66. |
Overvaluation of domestic currency makes |
| A. | Foreign goods cheaper and exports dearer in foreign countries |
| B. | Foreign goods dearer and exports cheaper in foreign countries |
| C. | Domestic goods cheaper and foreign goods dearer |
| D. | None of the above |
| Answer» B. Foreign goods dearer and exports cheaper in foreign countries | |
| 67. |
The most important items in the current account are |
| A. | Foreign aid and pensions |
| B. | Private remittances and gifts |
| C. | Merchandise exports and imports |
| D. | Transportation and insurance |
| Answer» D. Transportation and insurance | |
| 68. |
Lending to foreign countries represents |
| A. | Capital inflows |
| B. | Capital outflows |
| C. | Services outflows |
| D. | Services inflows |
| Answer» C. Services outflows | |
| 69. |
Payment to foreign country is a |
| A. | Credit transaction |
| B. | Debit transaction |
| C. | Internal transaction |
| D. | External transaction |
| Answer» C. Internal transaction | |
| 70. |
Which of the following is not a part of capital account? |
| A. | Lending to foreign countries |
| B. | Direct investments in foreign countries |
| C. | Transfer payments |
| D. | None of the above |
| Answer» D. None of the above | |
| 71. |
The category that do not includes in the balance of payments account is/are |
| A. | The current account |
| B. | The capital account |
| C. | The official settlements account |
| D. | The savings account |
| Answer» E. | |
| 72. |
The expression (X-M) denotes |
| A. | The balance of trade |
| B. | The balance of payments |
| C. | The domestic trade |
| D. | None of the above |
| Answer» B. The balance of payments | |
| 73. |
If the difference between exports and imports is zero |
| A. | Balance of trade balances |
| B. | Balance of payments balances |
| C. | Capital account equals current account |
| D. | None of the above |
| Answer» B. Balance of payments balances | |
| 74. |
The current account BOP deficit will be beneficial for the economy if foreign borrowings are used to finance |
| A. | Transportation |
| B. | Shipping goods |
| C. | Real investment |
| D. | Small and medium enterprises |
| Answer» D. Small and medium enterprises | |
| 75. |
In the equation Y=C+I+G+(X-M), G denotes |
| A. | General expenditure |
| B. | Government expenditure |
| C. | Expenditure on gold |
| D. | Expenditure on goods |
| Answer» C. Expenditure on gold | |
| 76. |
If export is less than import, there is a .. in balance of trade. |
| A. | Surplus |
| B. | Deficit |
| C. | Favourable |
| D. | Balance |
| Answer» C. Favourable | |
| 77. |
In the equation B=Rf-Pf, Pf represents |
| A. | Payments made by foreigners |
| B. | Payments made to foreigners |
| C. | Payments made to residents of a country |
| D. | Payments made to exporters |
| Answer» C. Payments made to residents of a country | |
| 78. |
Under direct control measures, the government aims at limiting |
| A. | The volume of imports |
| B. | The volume of exports |
| C. | Both imports and exports |
| D. | None of the above |
| Answer» B. The volume of exports | |
| 79. |
The difference between exports and imports of a country is its |
| A. | Balance of visible trade |
| B. | Balance of invisible trade |
| C. | Balance of payments |
| D. | None of the above |
| Answer» B. Balance of invisible trade | |
| 80. |
Devaluation results in |
| A. | Increase in domestic price of imports and decrease in foreign price of exports |
| B. | Increase in foreign price of exports and decrease in domestic price of imports |
| C. | Decrease in domestic price of imports and increase in foreign price of exports |
| D. | None of the above |
| Answer» B. Increase in foreign price of exports and decrease in domestic price of imports | |
| 81. |
Given the foreign exchange rate and prices in a country, an increase in the value of exports causes an increase in |
| A. | Expenditures |
| B. | Incomes |
| C. | Investments |
| D. | Employment |
| Answer» C. Investments | |
| 82. |
Undervaluation of currency encourages |
| A. | Imports |
| B. | Exports |
| C. | Investments |
| D. | None of the above |
| Answer» C. Investments | |
| 83. |
The equation Rf-Pf |
| A. | Surplus in balance of payments |
| B. | Deficit in balance of payments |
| C. | Equilibrium in balance of payments |
| D. | None of the above |
| Answer» C. Equilibrium in balance of payments | |
| 84. |
Which of the following account does not included in the Reserve account? |
| A. | IMF |
| B. | SDR |
| C. | Reserve and monetary gold |
| D. | Savings |
| Answer» E. | |
| 85. |
Imports in balance of payments account are shown as a |
| A. | Negative item |
| B. | Positive item |
| C. | Invalid item |
| D. | None of the above |
| Answer» B. Positive item | |
| 86. |
The BoP situation does not deteriorate so long as |
| A. | The primary deficit is under control |
| B. | The trade deficit is under control |
| C. | The fiscal deficit is under control |
| D. | Monetary deficit is under control |
| Answer» D. Monetary deficit is under control | |
| 87. |
Which of the following manages and monitors India s foreign exchange rate in order to correct deficit in BoP? |
| A. | The Reserve Bank of India |
| B. | The Government of India |
| C. | The Securities and Exchange Board of India |
| D. | The Ministry of External Affairs |
| Answer» B. The Government of India | |
| 88. |
imposition of a tariff improves the terms of trade of the imposing country but reduces its |
| A. | Commodity prices |
| B. | Volume of trade |
| C. | Cost of production |
| D. | None of the above |
| Answer» C. Cost of production | |
| 89. |
Under the Liberalized Exchange Rate Management System (LERMS), the rupee got a partial convertibility in the ratio |
| A. | 80:20 |
| B. | 70:30 |
| C. | 60:40 |
| D. | 50:50 |
| Answer» D. 50:50 | |
| 90. |
The actual exchange ratio between two countries will depend upon the |
| A. | Supply |
| B. | Price |
| C. | Reciprocal demand |
| D. | All of the above |
| Answer» D. All of the above | |
| 91. |
Under the gains from international trade, the gains from exchange is also known as the |
| A. | Partial gains |
| B. | Consumption gains |
| C. | Domestic gains |
| D. | Price gains |
| Answer» C. Domestic gains | |
| 92. |
The terms of trade refers to the rate |
| A. | At which the goods of one country is exchanged for the goods of another country |
| B. | At which the price of a country s import is calculated |
| C. | At which the price of a country s export is calculated |
| D. | All of the above |
| Answer» B. At which the price of a country s import is calculated | |
| 93. |
The tariff rates which are based on trade agreements or treaties with other countries is known as |
| A. | Revenue tariffs |
| B. | Protective tariffs |
| C. | Multiple column tariff |
| D. | Conventional tariff |
| Answer» E. | |
| 94. |
When import quotas are fixed after negotiations between the importing and exporting countries, it is known as |
| A. | Import licensing |
| B. | Mixing quota |
| C. | Bilateral quota |
| D. | Unilateral quota |
| Answer» D. Unilateral quota | |
| 95. |
The increase in the domestic production of a commodity due to imposition of a tariff is |
| A. | Protective or production |
| B. | Consumption effect |
| C. | Terms of trade effect |
| D. | Competitive effect |
| Answer» B. Consumption effect | |
| 96. |
Prof. Kindleberger calls the combined protective and consumption effect as |
| A. | Cost of the tariff |
| B. | Trade effect |
| C. | Income effect |
| D. | Revenue effect |
| Answer» C. Income effect | |
| 97. |
Once import quota is levied on a commodity, the domestic price of the commodity |
| A. | Fluctuates |
| B. | Remains constant |
| C. | Decreases |
| D. | Rises |
| Answer» E. | |
| 98. |
The widening of the Current Account Deficit during 2018-19 was on account |
| A. | A higher trade deficit |
| B. | A lower trade deficit |
| C. | A higher fiscal deficit |
| D. | A lower fiscal deficit |
| Answer» B. A lower trade deficit | |
| 99. |
An increase in domestic production of goods due to imposition of import quota is called |
| A. | Protective or production effect |
| B. | Consumption effect |
| C. | Revenue effect |
| D. | Price effect |
| Answer» B. Consumption effect | |
| 100. |
The tariffs or duties levied upon goods originating from abroad and scheduled for the home country are |
| A. | Exim duties |
| B. | Import duties |
| C. | Export duties |
| D. | None of the above |
| Answer» C. Export duties | |