Fundamentals of Business Activities Test 20

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Fundamentals of Business Activities Test 20

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Weekly Quiz Competition

Question 1
1 / -0

In the context of Indian Economy, there may be a need for importing foodgrains in case of:

A
Balancing exports and imports of foodgrains.

B
Severe shortages of foodgrains due to drought, floods, etc.

C
Increase in the consumption of foodgrains

D
None of the above

Solution

In the context of Indian Economy, there may be a need for importing food grains in case of severe shortages of food grains due to drought, floods, etc.
To cope up with the shortage of food, Government of India imports food grains from abroad to sustain the food crisis in the domestic economy.
Question 2
1 / -0

Disinvestment Process in India is criticized on the following grounds ________________.

A
Lack of Proper Planning

B
Privatisation of Profit-making PSUs only

C
Failure to meet Budget Targets

D
All of the above

Solution

Disinvestment Process in India is criticized on the following grounds :-a) Lack of Proper Planning b) Privatization of Profit-making PSUs only
c) Failure to meet Budget Targets
Disinvestment can be defined as a process of transferring the ownership of an enterprise from public sector to the private sector of the economy.
Question 3
1 / -0

The term disinvestment is more popularly used ____________________________.

A
Where a holding company sells shares of a Subsidiaray company

B
Where an investment company off loads its holding

C
Where central / State government sells its holdings of public sector companies

D
None of the above

Solution

The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies.Disinvestment means selling of Public investment to a Private entrepreneur.Disinvestment of the public sector can be defined as a process of transferring the ownership of any enterprise from public to private sector.
Question 4
1 / -0

Which of the following statement is correct?

A
Supply of land is perfectly elastic

B
Fertility of land cannot change

C
Land does not yield any result unless human efforts are employed

D
Supply of land can be increased

Solution

Land does not yield (product) anything, unless human efforts are employed is correct statement.
Question 5
1 / -0

A large Firm can offer better security to Bankers and obtain credit easily. This creates ________ for such Firm.

A
Internal Economies of Scale

B
Internal Diseconomies of Scale

C
External Economies of Scale

D
External Diseconomies of Scale

Solution

A large Firm can offer better security to Bankers and obtain credit easily. This creates Internal Economies of Scale for such Firms. Internal Economies of Scale generally causes the average cost to fall and the production gets increased. It is related to the internal factors of the business firm.
Question 6
1 / -0

In India, in which of the following, Foreign Direct Investment (FDI) is not allowed?

A
Drugs and Pharmaceuticals

B
Electricity Generation

C
Defence

D
Rail Transport

Solution

In India, in Rail Transport, Foreign Direct Investment (FDI) is not allowed. In the railway sector FDI is not permitted by the Government of India. Railway sector is completely owned, managed and controlled by the Indian Government.
Question 7
1 / -0

Quantitative Methods aim at influencing _______________________.

A
The end-use of credit in specific areas

B
The total volume of credit in the banking system

C
Both (a) and (b)

D
Neither (a) nor (b)

Solution

Quantitative Methods aim at influencing the total volume of credit in the banking system.Quantitative measures to control credit are also known as general measures. Quantitative instruments of control credit are those instruments which focus on overall supply of money in the economy. These measures are used in a manner such that overall supply of money in the economy is reduced during inflation and increased during deflation.
Question 8
1 / -0

All of the following developments were noticed during $$1991$$(when economic reforms were enforced), except _________.

A
national debt was nearly $$60$$ per cent of the GNP of India

B
inflation crossed double digits

C
foreign reserves were maintained at a very high level

D
none of the above

Solution

When economic reforms were enforced foreign reserves available were just sufficient to finance imports of three weeks.
Question 9
1 / -0

Net domestic expenditure is consumption expenditure plus _____________.

A
net foreign investment

B
net foreign investment plus net domestic investment

C
net domestic investment

D
replacement expenditure

Solution

Net domestic expenditure refers to the net expenditure incurred during a given period of time within an economy. It can be measured as consumption expenditure plus net domestic investment.
Question 10
1 / -0

Which of the following is not a quantitative method of credit control __________________.

A
Bank Rate policy

B
Open market operations

C
The Repo Rate

D
Consumer credit regulation

Solution

Quantitative or traditional methods of credit control consist of banks rate policy, open market operations and variable reserve ratio. Qualitative or selective methods of credit control consist of the guideline of margin requirement, credit rationing, regulation of customer credit and direct action.
Quantitative controls are planned to control the volume of credit created by the banking system qualitative measures or selective methods are intended to regulate the flow of credit in specific uses.
The correct option is D.

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Fundamentals of Business Activities Test 20

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Fundamentals of Business Activities Test 20

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Question 1

Balancing exports and imports of foodgrains.

Severe shortages of foodgrains due to drought, floods, etc.

Increase in the consumption of foodgrains

None of the above

Solution

Question 2

Lack of Proper Planning

Privatisation of Profit-making PSUs only

Failure to meet Budget Targets

All of the above

Solution

Question 3

Where a holding company sells shares of a Subsidiaray company

Where an investment company off loads its holding

Where central / State government sells its holdings of public sector companies

None of the above

Solution

Question 4

Supply of land is perfectly elastic

Fertility of land cannot change

Land does not yield any result unless human efforts are employed

Supply of land can be increased

Solution

Question 5

Internal Economies of Scale

Internal Diseconomies of Scale

External Economies of Scale

External Diseconomies of Scale

Solution

Question 6

Drugs and Pharmaceuticals

Electricity Generation

Defence

Rail Transport

Solution

Question 7

The end-use of credit in specific areas

The total volume of credit in the banking system

Both (a) and (b)

Neither (a) nor (b)

Solution

Question 8

national debt was nearly $$60$$ per cent of the GNP of India

inflation crossed double digits

foreign reserves were maintained at a very high level

none of the above

Solution

Question 9

net foreign investment

net foreign investment plus net domestic investment

net domestic investment

replacement expenditure

Solution

Question 10

Bank Rate policy

Open market operations

The Repo Rate

Consumer credit regulation

Solution

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