OAS Prelims-2020 Daily Practice Set-10/06/2020

Paper:   General Studies Paper-I

Section:  Economic and Social Development

Topic:  Macroeconomics

1. With reference to the money supply in India which of the following is not correct?
a) M1 includes currency and coins with public, demand deposits of the banks and other deposits with the RBI
b) M2 includes M1 and post office savings
c) M3 includes the sum of M1 and M2
d) M4 includes the sum of M3 and demand as well as time deposits of post offices

2. With reference to Broad money in India, which of the following statements is not correct?
a) Liquidity of broad money is high, so bank can lend money for lending programmes
b) RBI track the growth of broad money to help forecast inflation
c) Broad money includes deposits in savings account
d) None of the above

3. A country’s money multiplier depends on:
a) Fraction of cash banks hold as reserves
b) Fraction of cash held by Individuals and business
c) Both (a) and (b)
d) None of the above

4. Repo rate is:
a) Rate at which banks borrow from RBI
b) Rate at which RBI borrows from banks
c) Rate at which Banks collect money from share markets
d) Rate at which banks provide funds to NBFCs

5. Bank rate refers to the rate at which RBI will provide loan to the Banks. The increase of it will:
a) Decline the supply of money
b) Reflect the tightening of RBI’s monetary policy
c) Increase the cost of borrowings by commercial banks
d) All of the above

6. Closed economy means an economy having:
a) Deficit financing
b) Controlled supply of money
c) Imports only
d) No import or export

7. The first public sector fertilizer factory in India, which went into production in 1951, is at:
a) Talcher
b) Paradeep
c) Sindri
d) Jamshedpur

8. Devaluation of currency helps to promote:
a) Imports
b) Exports
c) Tourism
d) National income

9. The theory of unbalanced growth is propounded by:
a) Prof. Hirschman
b) Prof. Hicks
c) R. Nurkse
d) H. Leibenstein

10. The term ‘Free Trade’ frequently used in economics means:
a) Shopkeepers are free to fix their own price
b) There are no restrictions placed on foreign trade
c) The price mechanism is not hampered by government controls
d) Foreigners are allowed to sell goods in the home market


  1. C
  2. A
  3. C
  4. A
  5. D
  6. D
  7. C
  8. B
  9. A
  10. B

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