Mock Test-3 (Paper-1) (Question 51-100)

Total Questions: 50

11. Which one of the following statements is not correct.

Correct Answer: (d) When total utility is maximum, marginal and average utility are equal to each other.
Solution:When total utility is maximum, marginal utility

12. Who among the following has suggested migration to accrual accounting system from cash based accounting system in India?

Correct Answer: (d) C. Rangarajan

13. Consider the following actions by the Government:

1. Cutting the tax rates.

2. Increasing the government spending.

3. Abolishing the subsidies.

In the context of economic recession,

which of the above actions can be considered a part of the 'fiscal stimulus' package?

Correct Answer: (a) 1 and 2 only
Solution:Fiscal stimulus : Government measures, normally involving increased public spending and lower taxation are aimed at giving a positive jolt to economic activity.

14. Economic growth is usually coupled with

Correct Answer: (b) Inflation
Solution:With increase in GDP, aggregate demand increases, because more production means people have more disposable income, which means more consumer spending. As a result, prices rise in response, and in conclusion because aggregate demand grows faster than long-term aggregate supply, economic growth will be coupled with inflation.

Hyper inflation - In economic, hyper inflation occurs when a country experience very high and usually actuarially rates of inflation. Economic growth is usually coupled with inflation.

15. In India, inflation is measured by the :

Correct Answer: (c) consumers price Index Combined

16. Second demonetization of currency notes in independent India took place during the tenure of ....... as Minister of Finance, GoI.

Correct Answer: (a) H.M. Patel
Solution:The Janta Party coalition government led by Morar Ji Desai demonetized the currency notes of ₹ 1,000, ₹ 5,000 and ₹ 10,000 on 16 January 1978 to curb counterfeit currency and black money. The Finance Minister was Haribhai M. Patel at the time.

17. Which one of the following states is the first state to impose Agriculture Income Tax in India?

Correct Answer: (d) Bihar
Solution:Bihar is the first state to impose agricultural income tax in India. Agricultural income tax is levied on the income from Agriculture. At present agriculture is subjected to two direct taxes and they are Agricultural Income tax and Land Tax.

Agricultural Income tax treatment: It is characterised as a valid source of income from 'sources that comprise Agriculture land, buildings on or related to Agricultural land, commercial produce from an Agriculture land.

18. Corporation tax is imposed by

Correct Answer: (b) Central Government
Solution:Corporation Tax is imposed by Central Government

19. Goods and Services Tax likely to be levied in India is not a

Correct Answer: (a) gross value tax
Solution:GST would be applied at each stage of sale/purchase of goods services, according to value added.

20. An increase in CRR by the Reserve Bank of India results in

Correct Answer: (b) reduction in liquidity in the economy
Solution:The Cash Reserve Ratio is the amount of funs that the banks are bounds to keep with Reserve bank of India as a portion of their Net Demand and Time Liabilities (NDTL).

When RBI increases the CRR, less funds are available with banks as they have to keep larger portions cf their cash in hand with RBI. This means that banks will now have less money to play with. This resulted reduction in liquidity in the economy.