23.20       ndian   onom
      4. Consider the given statements regarding           1. Cut CRR and optimise SLR.
         subsidies.                                        2. Increase MSF Rate.
          1. They are essential parts of public            3. Cut Bank Rate and increase Reverse
               policy to the extent they are ad hoc            Repo Rate
               arrangements.
                                                          Select the answer using the code given
          2. While everybody benefits from it, they
                                                          below:
               are not paid by all.
                                                          (a) 1 and 2
          3. Capital part of subsidies is counted
               in the planned expenditure of the          (b) Only 1
               government.                                (c) 2 and 3
          4. The FRBM Act has strict provisions           (d) Only 2
               regarding subdies.                      7. Which of the following ‘redistributive’
         Select the incorrect statements using   the      policies the government will not adopt if it
         code given below:                                wants to bridge economic inequality?
                                                           1. Rationalising subsidies
         Code:
                                                           2. Progressive tax policies
         (a) 1, 2 and 3
                                                           3. Regressive expenditure
         (b) 1, 3 and 4
         (c) 2, 3 and 4                                   Select the answer using the code given
         (d) 1, 2, 3 and 4                                bolow.
                                                          (a) 1 and 2
      5. Which among the following is/are not
         counted as ‘public expenditure’.                 (b) Only 2
          1. Expenditure           categorised     as     (c) 2 and 3
               ‘consumption’.                             (d) Only 3
          2. Expenditure known as ‘investment’         8. Which of the following will be the outcome
               and ‘capital creation’                     once an economy is under an inflationary
          3. Expenditure        in     ‘running   the     pressure?
               government’.                                1. Domestic currency heads for
          4. Expenditure in forwarding ‘external               depreciation
               grants’.                                    2. Exports become less competitive with
         Select the correct answer using the code              imports getting costlier
         given below:                                      3. Cost of borrowing decreases
         (a) 1, 2 and 3                                    4. Bond-holders get benefitted
         (b) 1, 3 and 4                                   Select the answer using the code given
         (c) 2, 3 and 4                                   below:
         (d) 1, 2, 3 and 4                                (a) 1 and 2
      6. If the RBI decides to adopt an ‘expansionist’    (b) Only 2
         monetary policy, which of the following it       (c) 1 and 3
         would not do?                                    (d) Only 3