Unit- VI

Multiple Choice Questions (MCQs)

1. Which sector contributes the most to India’s GDP?
   a) Agriculture
   b) Industry
   c) Services
   d) Mining
   Answer: c

2. The term LPG refers to:
   a) Liquid Petroleum Gas
   b) Liberalisation, Privatisation, Globalisation
   c) Local Public Governance
   d) Legal Private Goods
   Answer: b

3. Which of the following is an instrument of monetary policy?
   a) Tax rate
   b) Government spending
   c) Repo rate
   d) Subsidies
   Answer: c

4. Fiscal policy deals with:
   a) Money supply
   b) Interest rate
   c) Government revenue and expenditure
   d) Stock market regulation
   Answer: c

5. Sensex represents:
   a) 100 companies
   b) 50 companies
   c) 30 companies
   d) All listed companies
   Answer: c

6. Inflation refers to:
   a) Decrease in money supply
   b) Increase in prices
   c) Decrease in GDP
   d) Increase in subsidies
   Answer: b

7. Which is the central bank of India?
   a) SBI
   b) RBI
   c) HDFC
   d) NABARD
   Answer: b

8. Which of the following is not a function of commercial banks?
   a) Accepting deposits
   b) Issuing currency
   c) Giving loans
   d) Transfer of funds
   Answer: b

9. WTO was established in:
   a) 1985
   b) 1991
   c) 1995
   d) 2001
   Answer: c

10. The IMF primarily works to:
    a) Regulate stock markets
    b) Promote international trade
    c) Provide long-term credit to countries
    d) Maintain exchange rate stability
    Answer: d

11. Which is a tool of fiscal policy?
    a) CRR
    b) Taxation
    c) Bank rate
    d) Open market operations
    Answer: b

12. What does the term ‘GATT’ stand for?
    a) Global Agreement on Trade and Tariffs
    b) General Agreement on Tariffs and Trade
    c) General Alliance for Trade and Tariffs
    d) Global Accord for Trade and Tariffs
    Answer: b

13. Which institution replaced GATT?
    a) IMF
    b) WTO
    c) ADB
    d) BRICS
    Answer: b

14. Monetary policy is implemented by:
    a) Ministry of Finance
    b) Planning Commission
    c) Reserve Bank of India
    d) State Government
    Answer: c

15. Privatization means:
    a) Government ownership
    b) Sale of assets to private sector
    c) Increase in subsidies
    d) Increase in government jobs
    Answer: b

16. Which of the following best describes liberalisation?
    a) Removal of trade restrictions
    b) Nationalisation of industries
    c) Increase in government control
    d) Higher import duties
    Answer: a

17. Inflation affects:
    a) Only the poor
    b) Only the rich
    c) Everyone
    d) Only the government
    Answer: c

18. Which of the following is not included in India's monetary policy tools?
    a) Repo rate
    b) CRR
    c) SLR
    d) Tax rate
    Answer: d

19. Which organization provides short-term loans to member countries?
    a) IMF
    b) WTO
    c) World Bank
    d) ADB
    Answer: a

20. Which bank controls inflation by increasing interest rates?
    a) SBI
    b) RBI
    c) HDFC
    d) ICICI
    Answer: b

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Fill in the Blanks

1. The Reserve Bank of India is the __________ bank of the country.
   Answer: central

2. Sensex is associated with the __________ Stock Exchange.
   Answer: Bombay

3. __________ policy deals with government revenue and expenditure.
   Answer: Fiscal

4. Liberalisation, Privatisation, and Globalisation together form the __________ policy.
   Answer: LPG

5. __________ is the persistent rise in the general price level.
   Answer: Inflation

6. The __________ formulates and implements the monetary policy in India.
   Answer: RBI

7. __________ replaced the GATT agreement in 1995.
   Answer: WTO

8. IMF stands for __________ Monetary Fund.
   Answer: International

9. The __________ policy controls the money supply in an economy.
   Answer: monetary

10. Commercial banks accept __________ from the public.
    Answer: deposits