[GKmojo]

Economy & Finance MCQs Set 1

1) Since 1983, the RBI's responsibility with respect to Regional Rural Banks was
transferred to
A. SEBI
B. NABARD
C. SIDBI
D. SBI

Ans- B

2) Devaluation of currency leads to

A. fall in domestic prices
B. increase in domestic prices
C. no impact on domestic prices
D. erratic fluctuations in domestic prices

Ans- B

3) NNP stands for

A. Net National Product B. National net Product
C. Net National income D. National New Product

Ans- A

4) The budget deficit means-

A. the excess of total expenditure, including loans, net of lending over revenue receipts
B. difference between revenue receipts and revenue expenditure
C.difference between all receipts and all the expenditure
D.fiscal deficit less interest payments

Ans- C

5) In India, which one among the following formulates the fiscal policy?
A. Niti Aayog
B. Ministry of Finance
C.Finance Commission
D.The Reserve Bank of India

Ans- B

www.gkmojo.com Page 1
6) How many banks were nationalized in 1969?
A. 16 B. 14
20
C.15 D.
Ans-B

7) Fiscal deficit in the Union Budget means

A. the difference between current expenditure and current revenue

B. net increase in Union Governments borrowings from the Reserve Bank of India
C.the sum of budgetary deficit and net increase in internal and external borrowings
D.the sum of monetized deficit and budgetary deficit

Ans- C
Note: A fiscal deficit occurs when a government's total expenditures exceed the
revenue that it generates, excluding money from borrowings. Deficit differs from debt,
which is an accumulation of yearly deficits.

8) Reserve Bank of India was nationalized in the year

A. 1935 B. 1945
C.1949 D.1969

Ans- C

9) The banks are required to maintain a certain ratio between their cash in the hand and
totals assets. This is called-
A. Statutory Bank Ratio (SBR)
B. Statutory Liquid Ratio (SLR)
C.Central Bank Reserve (CBR)
D.Central Liquid Reserve (CLR)

Ans- B

10) Which of the following is not a payment bank?

A. Airtel Payment Bank

B. Paytm Payment Bank
C. Indian post Payment Bank
D. All are payment banks

www.gkmojo.com Page 2
Ans-d

11) Depreciation means-

A. closure of a plant due to lock out
B. closure of a plant due to labour trouble
C.loss of equipment over time due to wear and tear
D.destruction of a plant in a fire accident

Ans- C

12) In the second nationalization of commercial banks, ___ banks were nationalized.
A. 4 B. 5
C.6 D.8

Ans- c
Note:- Nationalization of banks happened twice, one in 1969 when 14 banks were
nationalized, another in 1980 when 6 banks were nationalized.

13) Devaluation of a currency means:

A. reduction in the value of a currency vis-a-vis major internationally traded currencies
permitting the currency to seek its worth in the international market
B.

C.fixing the value of the currency in conjunction with the movement in the value of a
basket of pre-determined currencies

D.fixing the value of currency in multilateral consultation with the IMF, the World Bank
and major trading partners

Ans- A

14) The central banking functions in India are performed by the

I. Central Bank of India

II. Reserve Bank of India
III. State Bank of India
IV. Punjab National Bank

www.gkmojo.com Page 3
A. I, II
B. II
C.I
D.II, III

Ans- B

15) Deficit financing means that the government borrows money from the
A. RBI
B. local bodies
C.big businessmen
D.IMF

Ans- A

16) Govt. budget is balanced when:

Govt. expenditure outstrips tax Govt. tax receipts outstrips

A. B.
receipts expenditure

Government expenditure equals

C. D. None of the above
tax revenue

Ans: C

17) A direct tax is that which:

Can be directly deposited in the

A. Is heavy burden on the tax payers B.
banks

Is paid by the person on whom it is

C. Cannot be evaded D.
levied

Ans: D

www.gkmojo.com Page 4
18) If Income tax is assessed as Rs. 100 on an income of Rs. 1000. Compared to this,
which one of the following indictes that the income tax rate is progressive?

A. Rs. 150 tax on Rs. 2000 income B. Rs. 350 tax on Rs. 3000 income

C. Rs. 400 tax on Rs. 4000 income D. Rs. 450 tax on Rs. 5000 income

Ans: B

19) To bring equitable distribution of income in the country taxes should be

A. Direct B. Indirect

C. Proportional D. Progressive

Ans: D

20) Which of the following would cause incomes to become more unequal:

Increased unemployment
A. Increased employment B.
allowance

C. More progressive taxes D. More regressive taxes

Ans: D, Regressive taxes mean, more tax from poor and less tax from rich.

21. What does the letter 'S' denotes in the term IFSC?
a) Subscriber
b) State
c) System
d) Source

Ans: c) System
The Indian Financial System Code (IFSC Code) is an alphanumeric code that uniquely
identifies a bank-branch participating in the Real Time Gross Settlement (RTGS) and
the National Electronic Funds Transfer (NEFT) Systems.

www.gkmojo.com Page 5
22. Who regulates the Mutual Funds in India?
a) FRBI
b) SEBI
c) SIDBI
d) RBI

Ans: b) SEBI
The Securities and Exchange Board of India is the regulator for the securities market in
India.

23. Which one of the following is the rate at which the RBI lends money to commercial
banks in the event of any shortfall of funds?
a) Benchmark Prime Lending Rate
b) Annual Percentage Rate
c) Bank Rate
d) Repo Rate

Ans: d) Repo Rate

If Repo rate increases it becomes expensive to borrow money from RBI and vice versa.

24. Which is the first bank established in India?

a) Bank of Calcutta
b) Bank of Hindustan
c) General Bank of India
d) State Bank of India

Ans: b) Bank of Hindustan

Bank of Hindustan was established in 1770.

25. Which is the first Indian bank started solely with Indian capital investment?
a) Canara Bank
b) Central Bank of India
c) Punjab National Bank
d) State Bank of India

Ans: c) Punjab National Bank

It was founded in 1894 by Lala Rajpat Rai.

www.gkmojo.com Page 6
26. Which is the first bank to introduce Internet banking?
a) Canara Bank
b) ICICI Bank
c) Punjab National Bank
d) State Bank of India

ANSWER: b) ICICI Bank

ICICI Bank was introduced in 1994.

27. Which is the first bank to introduce credit card in India?

a) Canara Bank
b) Central Bank of India
c) Bank of Baroda
d) ICICI Bank

ANSWER: b) Central Bank of India

Central Bank was the first public bank to introduce credit card in India.

28. Which is the largest public sector bank in India?

a) Bank of Baroda
b) Canara Bank
c) Central Bank of India
d) State Bank of India

ANSWER: d) State Bank of India

It is a government-owned corporation with its headquarters in Mumbai.

29. Which is the largest private sector bank in India?

a) Axis Bank
b) ICICI Bank
c) HDFC Bank
d) South Indian Bank

ANSWER: b) ICICI Bank

It offers a wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialized subsidiaries in the
areas of investment banking, asset management etc.

www.gkmojo.com Page 7
 30. Which is the first Indian bank to open branch outside India?
a) Andhra Bank
b) Bank of Baroda
c) Bank of India
d) Canara Bank

ANSWER: c) Bank of India

Bank of India is the first Indian bank to open branch outside India at London in 1946.

31. Which is the first bank to introduce ATM in India?

a) HSBC
b) Standard Chartered Bank
c) State Bank of India
d) United Bank of India

ANSWER: a) HSBC
Hongkong and Shanghai Banking Corporation introduced ATM in 1987.

32. Who signs on 1 Rupee currency note?

a) Governor of RBI
b) Finance Secretary
c) Finance Minister
d) The President

ANSWER: b) Finance Secretary

The Ministry of Finance concerns itself with taxation, financial legislation, capital
markets, centre and state finances, and the Union Budget.

33. What is the full form of CVV?

a) Call Verification Value
b) Card Verification Value
c) Credit Verification Value
d) None

ANSWER: b) Card Verification Value

It is a security feature for payment card transactions. It reduce the credit card
fraud.

www.gkmojo.com Page 8
34. How many digits are there in IFSC Code?
a) 10
b) 11
c) 12
d) 13

ANSWER: b) 11
The Indian Financial System Code (IFSC) is a 11 character code for identifying the
bank and branch which an account is held. The IFSC code is used by the NEFT,
RTGS and IMPS finance transfer syste

35. What is the full-form of HDFC?

a) Housing Department Finance Corporation
b) Housing Development Financial Corporation
c) Housing Development Finance Corporation
d) Housing Development Finance Company

ANSWER: c) Housing Development Finance Corporation

36. Which among the following is not a public sector bank?

a) Allahabad Bank
b) City Union Bank
c) UCO Bank
d) Vijaya Bank

ANSWER: b) City Union Bank

The City Union Bank is a private sector bank. The bank 'The Kumbakonam Bank
Limited', as it was called then was organized as a limited company on the 31st of
October, 1904. In the beginning it was a regional bank but steadily built for itself a place
in the Delta District of Thanjavur.

37. Per capita Income is obtained by dividing National Income by

a. Area of the country
b. Total working population
c. Total Population of the country
d. Total population above 16 years

www.gkmojo.com Page 9
Ans: c

38. Which of the following tax is not subsumed in GST?

A. Excise duty
B. Value added tax
C. Property tax
D. Entertainment tax

Ans: c, GST has subsumed all indirect taxes, not direct taxes.

39. Which of the following is not a Component of Human Development Index [HDI]?
A. Life expectancy
B. Per capita income
C. Educational attainment
D. Sex ratio

Ans: D

40. In which census decade the decadal population growth of India was recorded
highest?
a. 1951-61
b. 1961-71
c. 1971-81
d. 1981-91

Ans: b

All the best by GKmojo

www.gkmojo.com Page 10