Basic Economics and Banking - One Line Questions

1. What is the 'multiplier effect' in economics? — An increase in investment leads to a larger increase in aggregate income.
2. What is inflation? — A general increase in the price level of goods and services.
3. Which of the following is a non-performing asset (NPA) for a bank? — A loan where the principal or interest payment is overdue for a specified period.
4. What does the term 'monopoly' signify in economics? — A market with a single seller dominating the market.
5. What does the 'liquidity trap' refer to in monetary economics? — A situation where interest rates are so low that monetary policy becomes ineffective.
6. Which of the following is NOT a function of a commercial bank? — Issuing currency
7. What is the term for the decrease in the value of an asset over time due to wear and tear or obsolescence? — Depreciation
8. What does the Law of Demand state? — As price increases, quantity demanded decreases.
9. Which of the following is a tool of fiscal policy? — Government Expenditure
10. Which of the following is a type of financial market where short-term debt instruments are traded? — Money Market
11. Which economic system emphasizes collective ownership and control of the means of production? — Socialism
12. Which type of economy is characterized by private ownership of resources and market-driven decisions? — Capitalist Economy
13. Which type of bank focuses on providing loans and financial services to agricultural and rural sectors? — Regional Rural Bank (RRB)
14. Which of the following is a feature of a mixed economy? — Coexistence of public and private sectors.
15. Which of the following is a measure of national income? — Gross Domestic Product (GDP)
16. Which of the following is a form of indirect tax? — Customs Duty
17. What is the term for the difference between a country's total exports and total imports? — Balance of Trade
18. What is the term for the amount of money that producers are willing and able to offer for sale at a given price? — Supply
19. Which of the following is a factor of production in economics? — Land
20. Which type of unemployment occurs when workers' skills do not match the available jobs? — Structural Unemployment
21. Which economic indicator measures the cost of a basket of goods and services purchased by a typical urban household? — Consumer Price Index (CPI)
22. What is fiscal policy primarily concerned with? — Government spending and taxation
23. Which economic concept represents the total value of goods and services produced per person in a country? — GDP per capita
24. What does GDP stand for? — Gross Domestic Product
25. Which economic concept describes the total value of all goods and services produced within a country in a specific period? — Gross Domestic Product (GDP)
26. What is the 'stagflation' phenomenon? — High unemployment with high inflation.
27. Which of the following is a tool of monetary policy used by the RBI? — Repo Rate
28. What is the fundamental economic problem that arises due to limited resources and unlimited wants? — Scarcity
29. What is the main objective of a public sector bank? — Providing financial services to the public, often with social objectives
30. What does the 'Balance of Payments' account track? — All economic transactions between a country and the rest of the world.
31. Which economic concept measures the value of the next best alternative forgone when a choice is made? — Opportunity Cost
32. Which of the following is a type of financial asset? — Stocks
33. Which term describes the situation where demand for goods and services exceeds the supply? — Shortage
34. What is the role of the Reserve Bank of India (RBI)? — All of the above
35. Which banking term refers to the interest rate at which the RBI lends money to commercial banks? — Bank Rate
36. Which of the following is a direct tax? — Income Tax
37. Which institution is responsible for issuing India's currency? — Reserve Bank of India
38. What is the primary function of money? — All of the above
39. What is the term for the amount of money that consumers are willing and able to buy at a given price? — Demand
40. What is the 'marginal propensity to consume'? — The proportion of additional income that is spent on consumption.
41. What is the 'reverse repo rate'? — The rate at which commercial banks lend to the RBI.
42. What is the 'repo rate'? — The rate at which commercial banks borrow money from the RBI.
43. What does the term 'liquidity' refer to in economics? — The ease with which an asset can be converted into cash without affecting its market price.
44. What is the main goal of monetary policy? — To manage inflation and promote economic growth.
45. What is the primary role of the International Monetary Fund (IMF)? — To promote global monetary cooperation, financial stability, and international trade.
46. What is the primary purpose of the Goods and Services Tax (GST) in India? — To simplify the indirect tax structure and create a common national market.
47. What is the primary function of the World Trade Organization (WTO)? — To regulate international trade and resolve disputes.
48. What is the primary role of the Securities and Exchange Board of India (SEBI)? — To regulate the stock market and protect investors.
49. What is 'disguised unemployment'? — Unemployment where more people are employed than actually needed.
50. Which economic indicator measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services? — Consumer Price Index (CPI)
All One Line Questions
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