Chapter Wise Indian Economy MCQ’s With Explanation

Today’s Topic: Money and Banking-4

These are most-important and most-expected Questions for IAS Prelims General Studies paper-1 (ECONOMY) of UPSC Civil Service exam. Every day Himalai is coming with different subjects questions and answers with explanation analysis, these Questions will be both theoretical and fact-based. Every day preparation will make a way for success, keep up your daily IAS Exam preparation with Himalai subject wise, chapter wise and topic wise Mcq’s with answers and analysis. We are providing our daily program list so that aspirant can note it and keep a watch on Himalai Mock test blogs for updated questions and get prepared for the Exam.

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Sunday- Indian and World Geography

Monday-General issues on Environmental Ecology, Bio-diversity and Climate Change

Tuesday- General Science

Wednesday- Indian Polity and Governance

Thursday- History of India and Indian National Movement

Friday- Economic and Social Development

Saturday-Current Affairs Concepts

Today’s Topic: Money and Banking-4

Q1. Match the list-I with list-II correctly and select your answer using the codes given below:

List – I (Printing Press)                         List – ii (Place)

a) Bank Note Press                             1. Hosahangabad

b) Security Printing press                    2.Nasik

c) Indian Security Press                      3.Hyderbad

d) Security Paper mill                          4.Dewas


A         B          C          D

a) 4        3          2          1

b) 4        3          1          2

c) 1        2          3          4

d) 1        2          4          3

Ans:     A


Bank Note Press          –           Devas

Security Printing Press            –           Hyderbad

Indian Security Press               –           Nasik

Security paper mill                   –           Hoshangabad.

Q2. Match the list-I with list-II correctly and select your answer using the codes given below:

List – I                             List – ii

a) Reliance Mukesh       1.  Ambani

b) Wipro                          2. Ajim Premji

c) Airtel                           3. Bharati Mittal

d) Nano Car                    4. Rathan Tata


A         B          C          D

a) 1        2          3          4

b) 1        2          4          3

c) 3        2          1          4

d) 4        3          1          2

Ans:     B

Explanation: Reliance  –           Mukesh Ambani

Wipro              –           Ajim Premji

Airtel               –           Bharati Mittal

Nano Car         –           Rathan Tata

Q3. National development Council:

  1. It prepares the general draft of five year plan.
  2. It monitors the implementation of the five year plan
  3. It evaluate the national planning
  4. It is a council of Prime minister and Chief Minister of India.

Choose the correct answer:

a) 3 and 4               b) Only 3               c) 1, 2 and 3                d) None of these

Ans:     A

Explanation:    National development council is the apex body for decision – making and deliberation on development matter in India, presided over by Prime minister. It was set up on 6th Aug, 1952 to strengthen and mobilize, the efforts and recourses of the nation in support of the plan.

Q4. Mid day meal Is not concered with:

a) Educational advancement               b) Social equity

c) Child Nutrition                                  d) Right to food

Ans:     D

Explanation:    Under article – 24 provides convention of the rights of the child. Mid day meal scheme is a multi- faceted programme of the government of India that among other things, seeks to address the issue of food security lack of nutritious an access to education on a planned national scale. It provides provision for free lunch on working days for children in primary and upper primary classes in government schools.

Q5. Swarna Jayanti Gramin Swarojgar Yojanan(SJGSY) :

  1. It was started in 1 April, 1995.
  2. It forces to work in a group.
  3. It is focused on to draw poor rural people to upper poverty to upper poverty line.

a) 1 and 2               b) 1 and 3               c) 1, 2 and 3                d) None of these

Ans:     C

Explanation:    Swarna Jayanti Gram Swarojgar yojana is an provide sustainable income to poor people living in rural areas of the country. This scheme was launced on April 1, 1999

Q6. Which one of the following releases monetary policy of India:

a) Finance Minister of India               b) Reserve Bank of India

c) Chief Minister of India                    d) International Monetary fund

Ans:     B

Explanation:    Monetary policy is the process by which the monetary authority of a country. RBI controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth instrument of monetary policy:

  1. Price stability                             2. Controlled expansion of bank credit

3. Promotion of fixed investment   4. Reducing the rigid

Q7. If the fiscal deficit of the Union Government is Rs 75000 crores relending to state in rs 25000 crores, what is the amount of the primary deficit?

a) 1,20,000                    b) 1,00,000                    c) 25,000                     d) 50,000

Ans:     D

Explanation:    Higher fiscal deficit in India has been one of the major reasons for higher levels of inflation in the Indian economy as compared to other developing and developed nations. The cycle of high deficit and high inflation can be explained in two different ways.

Q8. Consider the following statements regarding the ‘lorenz curve”:

  1. A straight line on it represents complete equality of income
  2. With greater curvature in it, the inequality of income rises.

Select the correct above statements,

a) Only 1                    b) Only 2                    c) 1 and 2                    d) None of these

Ans:     C

Explanation:    The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population that is cumulatively earned by the bottom % of the population.

Q9. Consider the following statement regarding the manual on financial and banking statistics:

  1. A manual published bi-annually by the Basel –based bank of international settlement.

2. The document provides the data on the world bank together with new prudential norms of running banking industry.

Select the correct above statements.

a) Only 1                    b) only 2                      c) 1 and 2                    d) none of above

Ans:     D

Explanation:    The manual was related by the RBI, which works as a reference guide and provides a methodological frame work for a compilation of statistical indicators encompassing various sectors of India economy.

Q10. Consider the following statements regards the ‘ junk bonds’ from the given list using the code given bellow:

  1. It is short-term lending at low interest rates.
  2. It is short-term lending.
  3. It is a secondary retail-lending.

a) Only 1                    b) Only 2                    c) 4 and 3                    d) 1, 2 and 3

Ans:    B

Explanation:    Junk bond which is considered below investment grade due to a significant risk of the defect by the issuer. The interest rate is higher in order to compensate holders for this risk.


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