National Income & the Role of RBI

JKSSB Finance Accounts Assistant · General Economics · 15 practice questions with answers and explanations: 3 Easy, 7 Medium, 5 Hard.

Sample questions

Sample Easy question 1

In India, one-rupee notes are issued by:

  1. The Reserve Bank of India
  2. State Bank of India
  3. NABARD
  4. The Ministry of Finance, Government of India
Show answer

Answer: D. The ₹1 note (and coins) are issued by the Government of India; all other notes are issued by the RBI.

Sample Medium question 2

What is 'GNP' (Gross National Product)?

  1. The total value of goods and services produced by a country's residents, including income from abroad
  2. The same as GDP with no difference
  3. Only domestic production
  4. Only agricultural output
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Answer: A. GNP includes income earned by residents abroad, unlike GDP which is strictly domestic.

Sample Hard question 3

How does the RBI use the 'repo rate' to control inflation?

  1. By raising the repo rate, it makes borrowing costlier, which can reduce spending and cool inflation
  2. By lowering the repo rate, it directly increases taxes
  3. The repo rate has no effect on inflation
  4. By fixing prices of all goods directly
Show answer

Answer: A. A higher repo rate raises borrowing costs across the economy, dampening spending and inflation.

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