Economics (Part – IV) - Mock Test 365

Total Questions: 50

11. Which of the following tax systems will help to reduce economic inequalities in India? [S.S.C. Online C.G.L. (T-I) 3.09.2016 (Shift-II)]

(a) Regressive Tax
(b) Progressive Tax
(c) Flat Rate Tax
(d) None of these

Correct Answer: (b) Progressive Tax

Solution:A progressive tax is a tax in which the tax rate increases as the taxable amount increases. Progressive taxes are imposed in an attempt to reduce the tax incidence of people with a lower ability to pay, as such taxes shift the incidence increasingly to those with a higher ability-to-pay. It reduces tax burdens on people who can least afford to pay them and is, thus, considered effective in reducing economic inequalities.

12. The goods that people consume more, when their price rises are called________ . [S.S.C. Online CHSL (T-I) 9.01.2017 (Shift-I)]

(a) Essential Goods
(b) Capital Goods
(c) Veblen Goods
(d) Giffen Goods

Correct Answer: (d) Giffen Goods

Solution:The goods that people consume more, when their price rises are called Giffen Goods. Therefore, a Giffen good shows an upward-sloping demand curve and violates the fundamental law of demand.

13. FCRA administered by the Ministry of Home Affairs stands for______ . [S.S.C. Online C.G.L. (T-I) 30.08.2016 (Shift-I)]

(a) Foreign Currency Regulation Act
(b) Foreign Contribution Regulation Act
(c) Foreign Contract Regulation Act
(d) Foreign Cartel Restriction Act

Correct Answer: (b) Foreign Contribution Regulation Act

Solution:FCRA administered by the Ministry of Home Affairs stands for Foreign Contribution Regulation Act. It is a law of the government of India which manages receipt of foreign contributions or help from outside India to Indian areas. This is important to ensure that such help does not affect political or other circumstances in India.

14. What is a Bilateral Monopoly Situation? [S.S.C. Online C.G.L. (T-I) 4.09.2016 (Shift-I)]

(a) When there are only two sellers of an article.
(b) When a commodity has only two customers.
(c) When a commodity has only one customer and one seller.
(d) When an article has two customers and two sellers.

Correct Answer: (c) When a commodity has only one customer and one seller.

Solution:A market situation in which there is only one seller of a commodity or an instrument and there is only one buyer to buy it, then it is called a bilateral monopoly.

15. What do you understand about the monopoly market? [C.P.O. S.I. 4.06.2016 (Shift-I)]

(a) A market condition in which there are a large number of buyers and sellers.
(b) A market situation where many companies sell the same product.
(c) A market condition where a single seller dominates.
(d) The market structure where there are a few large sellers of a product and a large number of buyers.

Correct Answer: (c) A market condition where a single seller dominates.

Solution:A market condition in which there is only one seller of a commodity and there is no immediate substitute for the commodity sold by him, then it is called a monopolistic market.

16. _________ refers to money that has already been spent and which cannot be recovered. [S.S.C. Online CHSL (T-I) 12.10.2020 (Shift-III)]

(a) Opportunity cost
(b) Replacement cost
(c) Imputed cost
(d) Sunk cost

Correct Answer: (d) Sunk cost

Solution:

Sunk cost refers to money that has already been spent and which cannot be recovered.

17. Capital adequacy ratio for a NBFC - MFI is________ . [S.S.C. Online CPO SI (T-I) 10.11.2022 (Shift-II)]

(a) 15% of the aggregate deposits
(b) 8% of the aggregate deposits
(c) 15% of the aggregate risk weighted assets
(d) 11% of the aggregate risk weighted assets

Correct Answer: (c) 15% of the aggregate risk weighted assets

Solution:The Capital Adequacy Ratio (CAR) for a Non-Bank-ing Financial Company Microfinance Institution (NBFC-MFI) is determined by the Reserve Bank of India (RBI) and is currently set at 15%. This means that an NBFC-MFI must maintain a minimum capital adequacy ratio of 15%, which is the ratio of its own funds to its risk-weighted assets. The own funds here include Tier I and Tier II capital, which comprises equity capital, free reserves, and other disclosed re-serves. The risk-weighted assets include loans, in-vestments, and other assets held by the NBFC-MFI, which are assigned different risk weights based on their credit quality.

18. Wall Street collapse led to________. [S.S.C. Online C.G.L.(T-I) 31.08.2016 (Shift-II)]

(a) World War II
(b) Recession
(c) U. S. attack on Iraq
(d) Great Depression

Correct Answer: (d) Great Depression

Solution:The Wall Street Crash of 1929 led to the beginning of the 10-year Great Depression that affected all Western industrialized countries. Also known as Black Tues-day, the Great Crash, or the Stock Market Crash of 1929, it began on October 24, 1929 ("Black Thurs-day"), and was the most devastating stock market crash in the history of the United States.

19. During a recession________ . [S.S.C. Online CHSL (T-I) 23.01.2017 (Shift-III)]

(a) producers will be cautiously optimistic
(b) there will be decrease in inventory
(c) there will be capacity under utilization
(d) there will be expansion in bank credit

Correct Answer: (c) there will be capacity under utilization

Solution:During a recession there will be capacity under utilization. A low capacity utilization rate will result in a decrease in price because there is excess capacity and insufficient demand for the output produced. Economies with a capacity ratio of much less than 100% can significantly boost production without affecting the associated costs.

20. Which of the following brings out the Consumer Price Index Number' for Industrial workers? [S.S.C. Online C.G.L.(T-I) 9.09.2016 (Shift-III)]

(a) RBI
(b) The Labour Bureau
(c) Commerce Department
(d) NITI Aayog

Correct Answer: (b) The Labour Bureau

Solution:The Consumer Price Index for industrial workers, the Consumer Price Index for agricultural workers, and the Consumer Price Index for rural workers are compiled by The Labor Bureau, which operates under the Ministry of Labor and Employment. Whereas the Consumer Price Index for urban non-labour workers was compiled by the CPI (UNME) [Central Statistical Organization (CSO)], which has been discontinued since 2008.

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Economics (Part – IV)