Macroeconomics Practice Test-04

Macroeconomics Important Questions

Q1) Fees of government college is a revenue receipt because (Choose the correct alternative)

1. It creates liabilities of the government.
2. It increases the assets of the government.
3. It neither creates any asset nor reduces any liability of the government.
4. It neither creates any liability nor reduces any asset of the government.

Ans.) It neither creates any liability nor reduces any asset of the government.

Q2) ____________ is exercised through discussions, letters and speeches to banks.

1. Moral suasion
2. Selective credit control
3. Margin requirement 
4. Open market operation

Ans.) Moral suasion

Q3) Banks create credit:

1. On the basis of assets
2. On the basis of securities
3. On the basis of deposits
4. None of these

Ans.) On the basis of deposits

Q4) ___________ bank controls the banking and monetary structure of India.

1. State Bank of India
2. Punjab National Bank of India
3. Oriental Bank of Commerce
4. Reserve Bank of India

Ans.) Reserve Bank of India

Q5) ____________ exchange rate is officially declared by the government.

1. Managed floating
2. Floating
3. Fixed
4. None of these

Ans.) Fixed

Q6) Money supply in India is:

1. Currency with the public
2. Demand deposits with the banks
3. Currency with the public and Demand deposits with the banks.
4. None of them

Ans.) Currency with the public and Demand deposits with the banks.

Q7) Foreign embassies in India are a part of India’s:

1. Economic territory
2. Geographical territory
3. Both (a) and (b)
4. None of the above

Ans.) None of the above

Q8) Unforeseen obsolescence of fixed capital assets during production is:

1. Consumption of fixed capital
2. Capital loss
3. Income loss
4. None of the above

Ans.) Capital Loss

Q9) Inflow of foreign exchange is recorded on the ______ (debit/credit) side in BoP Account.

Ans.) Credit side

Q10) Which of the following items is not included in the money supply of a country?

1. Time deposits
2. Coins and Currency
3. Demand deposits
4. None of these

Ans.) Time deposits

Q11) Identify the correct pair from the following Column 1 and Column 2:

Column 1	Column 2
(A) Investment by Apple phones in India	(i) Credit side of the current account of BoP
(B) Remittances to relative staying abroad	(ii) Debit side of the current account of BoP
(C) Export of software to Germany	(iii) Debit side of the current account of BoP
(D) Import of Machinery from France	(iv) Capital account of BoP

Alternatives:

1. (A) – (i)
2. (B) – (ii)
3. (C) – (iii)
4. (D) – (iv)

Ans.) (B) – (ii)

Q12) The components of money supply are:

1. Paper currency
2. Coins
3. Demand deposits
4. All of these

Ans.) All of these

Q13) If planned savings are greater than planned investment, inventories will _________ (increase/decrease).

Ans.) Increase

Q14) Fiscal deficit equals: (Choose the correct alternative)

1. Primary deficit minus interest payments
2. Primary deficit plus interest payments
3. Total budget expenditure minus total budget receipts
4. None of the above

Ans.) Primary deficit plus interest payments

Q15) _______ bank nurtures the market for government securities in India.

1. Commercial banks
2. Central bank
3. World bank
4. All of these

Ans.) Central bank