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 Indian Economy Questions

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Q:

As it relates to international trade, dumping

A) is the practice of selling goods in a foreign market at less than cost. B) is a form of price discrimination illegal under U.S. antitrust laws.
C) is defined as selling more goods than allowed by an import quota. D) constitutes a general case for permanent tariffs.
 
Answer & Explanation Answer: A) is the practice of selling goods in a foreign market at less than cost.

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Q:

Government borrowing to finance budget deficits _____.

A) will exert downward pressure on interest rates B) will have no effect on interest rates
C) will increase supply of loanable funds D) will put upward pressure on interest rates
 
Answer & Explanation Answer: D) will put upward pressure on interest rates

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Q:

The Certificate of Deposit (CD) is a negotiable money market instrument and issued in the form of?

A) Derivative Usance Promissory Note B) Usance Promissory Note
C) Demand Promissory Note D) Both a & b
 
Answer & Explanation Answer: B) Usance Promissory Note

Explanation:

The Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period. (Usance Promissory Note has to be paid after certain time period).

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Q:

An indifference curve measures the same level of ___________

A) Output from two factors B) Satisfaction from two commodities
C) Satisfaction from Income and Capital D) Satisfaction from expenditure and savings
 
Answer & Explanation Answer: B) Satisfaction from two commodities

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Q:

A ceramic pottery unit hires 8 craftsmen by paying each of them Rs 900 per day. The 9th craftsman demands Rs 950 per day. If this craftsman is hired then all other craftsmen must be paid Rs 950. The marginal resource (labour) cost of the 9th craftsman is _________.

A) Rs 1530 B) Rs 1050
C) Rs 50 D) Rs 1350
 
Answer & Explanation Answer: D) Rs 1350

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Q:

The major objective of monetary policy is to

A) increase government's tax revenue B) revamp the Public Distribution System
C) Promote economic growth with price stability D) weed out corruption in the economy
 
Answer & Explanation Answer: C) Promote economic growth with price stability

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Q:

Match the characteristics with their market structure:
(a) Firm has control over quantity of output but it must take into account reactions of competitors.
b) Firm will tend to set output so that it earns maximum profits.

A) (a) Oligopoly, (b) Pure competition B) (a) Monopolistic competition, (b) Oligopoly
C) (a) Pure Monopoly, (b) Pure competition D) (a) Oligopoly, (b) Pure Monopoly
 
Answer & Explanation Answer: D) (a) Oligopoly, (b) Pure Monopoly

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Q:

Which of the following is not an assumption of perfect competition?

A) There are many buyers and sellers B) Average total costs continually decrease.
C) The good sold by all sellers in the market is assumed to be homogeneous. D) Buyers and sellers in the market are assumed to have perfect information.
 
Answer & Explanation Answer: B) Average total costs continually decrease.

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