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VISIONIAS
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Test Booklet Series

TEST BOOKLET

G.S. PRE. (2025) MINI TEST – 5504

C
Time Allowed: One Hour Maximum Marks: 100

INSTRUCTIONS

1. IMMEDIATELY AFTER THE COMMENCEMENT OF THE EXAMINATION, YOU SHOULD CHECK THAT THIS BOOKLET
DOES NOT HAVE ANY UNPRINTED OR TURN OR MISSING PAGES OR ITEMS, ETC. IF SO, GET IT REPLACED BY A
COMPLETE TEST BOOKLET.

2. ENCODE CLEARLY THE TEST BOOKLET SERIES A, B, C OR D AS THE CASE MAY BE IN THE APPROPRIATE PLACE IN
THE ANSWER SHEET.

3. You have to enter your Roll Number on the Test Booklet in the Box
provided alongside. Do NOT write anything else on the Test Booklet.

4. This Test Booklet contains 50 items (Questions). Each item is printed in English. Each item comprises four
responses (answers). You will select the response which you want to mark on the Answer Sheet. In case you
feel that there is more than one correct response with you consider the best. In any case, choose ONLY ONE
response for each item.

5. You have to mark all your responses ONLY on the separate Answer Sheet provided. See direction in the
answers sheet.

6. All items carry equal marks. Attempt all items. Your total marks will depend only on the number of correct
responses marked by you in the answer sheet. For every incorrect response 1/3rdof the allotted marks will be
deducted.

7. Before you proceed to mark in the Answer sheet the response to various items in the Test booklet, you have to
fill in some particulars in the answer sheets as per instruction sent to you with your Admission Certificate.

8. After you have completed filling in all responses on the answer sheet and the examination has concluded, you
should hand over to Invigilator only the answer sheet. You are permitted to take away with you the Test
Booklet.

9. Sheet for rough work are appended in the Test Booklet at the end.

DO NOT OPEN THIS BOOKLET UNTIL YOU ARE ASKED TO DO SO

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1. Consider the following differences between 4. The Monetary Policy Committee (MPC)
Disinflation and deflation: determines the policy interest rate required
1. While Deflation is a decrease in general to achieve the inflation target. In this
price levels throughout an economy, context, which of the following may be
disinflation is the reduction of the rate of recommended by the MPC to control
inflation. deflation in the economy?
2. Deflation increases the value of money 1. Increase in Cash Reserve Ratio (CRR)
whereas disinflation decreases the value 2. Increase in Bank rate
of money. 3. Decrease in Reverse Repo Rate
Which of the statements given above is/are Select the correct answer using the code
correct? given below.
(a) 1 only (a) 1 and 2 only
(b) 2 only (b) 3 only
(c) Both 1 and 2 (c) 2 and 3 only
(d) Neither 1 nor 2 (d) 1, 2 and 3

2. Consider the following statements with

5. Which of the following statements is/are
reference to Inflationary Gap:
correct with reference to Stagflation?
1. It is the measure of the difference
1. Stagflation refers to a state of an
between the current level of real GDP
economy that is experiencing a
and the GDP of the economy operating
simultaneous increase in inflation and
at full employment level.
rising unemployment.
2. Inflationary gap is the result of a
2. The occurrence of stagflation proves the
deficiency in demand.
theory behind the Philips curve.
Which of the statements given above is/are
Select the correct answer using the code
correct?
given below.
(a) 1 only
(a) 1 only
(b) 2 only
(b) 2 only
(c) Both 1 and 2
(c) Both 1 and 2
(d) Neither 1 nor 2
(d) Neither 1 nor 2

3. Which of the following industries

are classified as the Core Industries in the 6. Consider the following statements about the

Index of Industrial Production? Statutory Liquidity Ratio (SLR):

1. Coal 1. SLR can be maintained in Cash, Gold, or
2. Automobiles Government Securities.
3. Electricity 2. SLR Reserves are kept with the Bank
4. Real Estate itself and not with the RBI.
Select the correct answer using the code Which of the statements given above is/are
given below. correct?
(a) 1, 2 and 4 only (a) 1 only
(b) 2 and 3 only (b) 2 only
(c) 1 and 3 only (c) Both 1 and 2
(d) 1, 2, 3 and 4 (d) Neither 1 nor 2

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7. Which of the following can be considered as 10. Consider the following statements about
liabilities for the Reserve Bank of India? Liquidity Adjustment Facility:
1. Gold reserves 1. It is available only to Scheduled
2. Currency notes held by Public Commercial Banks.
3. Loan to Commercial Banks 2. Only Central Government securities are

4. Investments in Government Securities used as collateral for availing this

Select the correct answer using the code facility.

Which of the statements given above is/are
given below.
correct?
(a) 1 only
(a) 1 only
(b) 2 and 3 only
(b) 2 only
(c) 2 and 4 only
(c) Both 1 and 2
(d) 2 only
(d) Neither 1 nor 2

8. Consider the following statements about the

11. Consider the following statements about the
Sterilization by RBI: Marginal Cost of Funds Based Lending Rate
1. It is done to stabilize the stock of money (MCLR):
in the economy from external shocks. 1. It is the minimum interest rate of a bank
2. The total reserves and deposits of RBI below which it normally cannot lend.
remain unchanged pre and post 2. It is determined at regular intervals by
sterilization exercise. the Reserve Bank of India.
Which of the statements given above is/are Which of the statements given above is/are
correct? correct?
(a) 1 only (a) 1 only
(b) 2 only (b) 2 only
(c) Both 1 and 2 (c) Both 1 and 2

(d) Neither 1 nor 2 (d) Neither 1 nor 2

12. In the context of economics, what are

9. Loans to which of the following sectors are
Negative interest rates?
eligible for consideration as loans under
(a) It is an unconventional policy used by
Priority Sector Lending?
Central Bank to push up inflation rates
1. Education
by reducing interest rates past zero.
2. Renewable Energy
(b) Negative interest rates is an
3. Housing
unconventional policy used by Central
4. Agriculture
Banks to attract foreign investors.
Select the correct answer using the code (c) Negative interest rates is an
given below. unconventional policy used by Central
(a) 1 and 3 only Banks to control high inflation rates.
(b) 2, 3 and 4 only (d) Negative interest rates is an
(c) 1, 2 and 4 only unconventional policy used by Central
(d) 1, 2, 3 and 4 Banks to increase the cost of borrowing.
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13. Consider the following statements with 16. Which of the following defines 'Cash
reference to Cost Push inflation: Deposit Ratio'?
1. Cost-push inflation is determined by (a) Ratio of money held by the public in
supply-side factors such as higher wages currency to that they hold in bank
etc. deposits.
2. Cost-push inflation can only occur when (b) Proportion of the total deposits
demand is relatively inelastic. commercial banks keep as reserves.
Which of the statements given above is/are (c) Ratio of cash held by the banks in
correct? comparison to gold.
(d) Ratio of Cash Reserve Ratio to Statutory
(a) 1 only
Liquidity Ratio fixed by RBI.
(b) 2 only
(c) Both 1 and 2
17. The situation experienced in an economy
(d) Neither 1 nor 2
when there is a sudden and temporary
increase in the prices of goods due to the
14. Consider the following differences between
steps being taken by the government to
core and headline inflation:
revive the economy from the recession is
1. Core Inflation reflects the rate of change called
in prices of all goods and services in an (a) Stagflation
economy, whereas headline inflation (b) Reflation
excludes items that face volatile price (c) Skewflation
movement. (d) Disinflation
2. Generally, core inflation is the preferred
tool for Central Banks to frame long- 18. With reference to the Consumer Price Index,
term policy. which of the following item has been given
Which of the statements given above is/are the highest weightage?
correct? (a) Fuel and Light
(a) 1 only (b) Housing
(b) 2 only (c) Clothing and Footwear
(c) Both 1 and 2 (d) Food and Beverages
(d) Neither 1 nor 2
19. Which of the following statements are
15. Consider the following statements with correct regarding the functions of the
reference to the measurement of Inflation: Reserve Bank of India?
1. Whereas CPI and WPI are based on a 1. It facilitates external trade and payment.
2. It introduces and upgrades safe and
limited basket of goods and services,
efficient modes of payment systems in
GDP deflator reflects the prices of all
the country.
domestically produced goods and
3. It performs merchant banking function
services in the economy.
for state governments.
2. Monthly change in inflation can be best
4. It maintains banking accounts of all
tracked using the GDP deflator.
scheduled banks.
Which of the statements given above is/are Select the correct answer using the code
correct? given below.
(a) 1 only (a) 1 and 2 only
(b) 2 only (b) 2, 3 and 4 only
(c) Both 1 and 2 (c) 1, 2, 3 and 4
(d) Neither 1 nor 2 (d) 3 and 4 only
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20. In the context of banking in India, the term 23. With reference to the Cash Reserve Ratio in
'spread' describe as India (CRR), consider the following

(a) It is the difference in the interest rates statements:

1. This varies as per an individual bank’s
between that paid by the banks to
financial situation and size.
depositors and the rate charged from the
2. All Scheduled Commercial Banks are
borrowers.
required to maintain the CRR.
(b) It is the difference in the rate of interest
3. Banks are paid a timely interest by the
between Repo and Reverse repo rate. RBI if they are successful in maintaining
(c) It is the ratio between assets and the CRR.
liabilities of commercial bank. Which of the statements given above is/are
(d) None of the above correct?
(a) 1 only
(b) 2 and 3 only
21. Which of the following activities can be
(c) 2 only
performed by the Small Financial Banks?
(d) 1, 2 and 3
1. Supplying credits to small and marginal
farmers 24. With reference to Non-Banking Financial
2. Supplying credits to micro and small Companies (NBFCs), consider the following
industries statements:
3. Being a business correspondent (BC) for 1. NBFCs can be registered either with

another bank SEBI or RBI.

2. It can issue cheques drawn on itself.
Select the correct answer using the code
Which of the statements given above is/are
given below.
correct?
(a) 1 only
(a) 1 only
(b) 1 and 2 only
(b) 2 only
(c) 2 and 3 only (c) Both 1 and 2
(d) 1, 2 and 3 (d) Neither 1 nor 2

22. Which of the following statement is correct 25. Which of the following statements is correct

regarding the 'Capital Adequacy Ratio'? regarding the term 'liquidity trap'?
(a) It is a situation when money gets held in
(a) It is a parameter to tackle the effect of
the banking system due to technical
inflation.
issues.
(b) It came up through an agreement which
(b) In this situation the interest rate gets
is known as Basel accord. increases manifold.
(c) It is same for banks across India. (c) Open Market Operation helps in
(d) The Primary dealers and NBFCs are overcoming this situation.
exempted from this. (d) None of the above
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26. With reference to fiat money in India, 29. Which of the following step(s) can be taken
consider the following statements: by the government to reduce the inflationary
1. It is backed by the guarantee of the gap?
Central Government. 1. Increasing the salaries of government
2. It is a virtual or digital currency that
employees.
makes use of encryption techniques.
2. Enhancing the minimum support price
Which of the statements given above is/are
(MSP) of the notified agricultural
correct?
(a) 1 only commodities.
(b) 2 only 3. Issuing of new dated securities by the
(c) Both 1 and 2 government.
(d) Neither 1 nor 2 Select the correct answer using the code
given below.
27. Which of the following mechanism can be (a) 1 and 3 only
done to reduce the menace of 'Non- (b) 1 and 2 only
Performing Asset' (NPA) in India?
(c) 2 and 3 only
1. Selling of NPAs
(d) 3 only
2. Approaching Lok Adalats
3. Infusing more capital into Banks
Select the correct answer using the code 30. Which of the following can be advantage(s)
given below. of inflation in developing economies?
(a) 1 only 1. It favours Foreign Portfolio Investments
(b) 2 and 3 only (FPI) in the market.
(c) 1 and 2 only 2. Inflation can be favorable for economic
(d) 1, 2 and 3 growth.
Select the correct answer using the code
28. Consider the following pairs:
given below.
Term Meaning
(a) 1 only
1. Hard : It is the international
(b) 2 only
currency currency in which the highest
faith is shown and is needed (c) Both 1 and 2
by every economy. (d) Neither 1 nor 2
2. Heated : It is used to denote the
currency domestic currency which is 31. In the context of economics, the Phillips
under enough pressure of curve states that
depreciation. (a) inflation results into creation of
3. Dear : It denotes a period of employment.
money comparatively higher/costlier
(b) with the rise of tax rate, the amount of
interest rates regime.
tax revenue collected by government
Which of the pairs given above is/are
increases upto a certain limit.
correctly matched?
(a) 1 only (c) inflation results into stagnant economic
(b) 1 and 2 only growth.
(c) 2 and 3 only (d) there is a positive relationship between
(d) 1, 2 and 3 rates of employment and GDP growth.
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32. Which of the statements best describes 35. Mumbai Inter-Bank Bid Rate (MIBID) is the
“skewflation” ? benchmark rate at which banks:
(a) It refers that there is meagre rise of (a) are willing to lend each other.
inflation in the economy due to slow
(b) would like to borrow from other banks.
economic growth.
(c) attract deposits from other banks.
(b) It is measure of inflation by excluding
commodities whose prices are more (d) charge an additional rate of interest on

volatile. public deposits.

(c) It is a situation in which price levels of
few goods increases at a faster rate 36. Consider the following statements with
compared to others. respect to Consumer Price Index:
(d) It is inflation caused by the changes in
1. It computes price changes in both goods
monetary policy.
and services.

33. Which of the following is/are the 2. It is computed by the Office of

Development Financial Institutions in India? Economic Advisor (OEA), Department

1. Reserve Bank of India of Industrial Policy and Promotion.
2. National Bank for Agriculture and Rural 3. It is taken as measure of inflation while
Development formulating monetary policy by RBI.
3. National Housing Bank
Which of the statements given above are
Select the correct answer using the code
correct?
given below.
(a) 1 only (a) 1 and 2 only

(b) 1 and 3 only (b) 2 and 3 only

(c) 1 and 2 only (c) 1 and 3 only
(d) 2 and 3 only (d) 1, 2 and 3

34. Which of the following correctly gives the

37. "The decrease in money supply in the
definition of “hot money”?
economy could not control the food inflation
(a) It refers to funds that are controlled by
as increase in price was caused by skewed
investors who actively seek short-term
returns. MSP policy, distortion caused by APMC
(b) It refers to the domestic currency which acts and inadequate cold storage facilities."
is under enough pressure of Which type of inflation best describes the
depreciation. situation given above?
(c) It is the international currency in which
(a) Stagflation
the highest faith is shown and is needed
(b) Demand pull inflation
by every economy.
(c) Structural inflation
(d) It refers to the most volatile shares in the
stock market. (d) None

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38. With reference to Payments Banks, consider 41. With reference to Inflation-Indexed Bonds in
the following statements: India, which of the following statements
1. Mobile companies and supermarket is/are correct?
chains can become a payment bank to 1. These are government-issued bonds
provide basic banking activities. which provide the investor with a
2. Payments Bank can accept fixed constant return irrespective of the
deposits as well as undertake lending
inflation in the economy.
business.
2. They are linked to CPI(Combined) for
3. Payments banks are required to comply
indexing inflation.
with the Statutory Liquidity Ratio (SLR)
Select the correct answer using the code
norms.
Which of the statements given above is/are given below.
correct? (a) 1 only
(a) 1 only (b) 2 only
(b) 2 and 3 only (c) Both 1 and 2
(c) 1 and 3 only (d) Neither 1 nor 2
(d) 1, 2 and 3
42. Which of the following statements is/are
39. Which of the following correctly describes correct regarding Peer to peer (P2P) lending?
an Escrow Account? 1. P2P lending is a form of crowdfunding
(a) A bank account through which NRIs can used to raise loans without pledging
operate their finances in India. security.
(b) An overseas bank account used by 2. The interest rate is fixed by way of a
MNCs for routing the funds through tax
mutual agreement between the borrower
havens for the purpose of tax evasion.
and lender.
(c) A third party bank account for
Select the correct answer using the code
safeguarding the seller against its buyer
given below.
from the payment risk.
(d) A bank account which earns regular (a) 1 only
interest in return for a fixed monthly (b) 2 only
deposits. (c) Both 1 and 2
(d) Neither 1 nor 2
40. Consider the following statements regarding
the Repo Rate: 43. Which of the following is/are the
1. Repo is an instrument with RBI for characteristic features of 'legal tender' in
borrowing funds only on an overnight India?
basis. 1. It is a medium of payment recognized by
2. Both government and corporate sector law.
securities can be used for borrowing 2. It has its own intrinsic value.
under repo rate.
3. All legal tenders are issued by the
3. Increase in the repo rate will increase the
Reserve Bank of India.
liquidity in the market.
Select the correct answer using the code
Which of the statements given above is/are
given below.
correct?
(a) 1 and 2 only (a) 1 only
(b) 2 only (b) 3 only
(c) 1 only (c) 1 and 3 only
(d) 1, 2 and 3 (d) 1, 2 and 3
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44. Why the Reserve Bank of India is known as 48. Consider the following statements regarding
‘lender of last resort’? the financial creditors under the Insolvency
1. It provides lending facilities to the banks and Bankruptcy Code in India:
at all times. 1. Financial creditors are those creditors
2. It provides foreign exchange to the who have provided goods or services to
government for meeting its import the corporate debtor.
obligations. 2. Only financial creditors can initiate the
Select the correct answer using the code corporate insolvency resolution process.
given below. Which of the statements given above is/are
correct?
(a) 1 only
(a) 1 only
(b) 2 only
(b) 2 only
(c) Both 1 and 2
(c) Both 1 and 2
(d) Neither 1 nor 2
(d) Neither 1 nor 2

45. In the context of the money supply in an

49. Consider the following statements:
economy, High Powered Money includes
1. If a Central bank decreases the reserve
(a) Interbank deposits, which a commercial
ratio, money multiplier in the economy
bank holds in other commercial banks. also decreases.
(b) deposits of the Government of India and 2. If the GDP of an economy remains
commercial banks held with RBI . constant, increase in the money supply
(c) currency in circulation with the public decreases the velocity of money.
and vault cash of commercial banks. Which of the statements given above is/are
(d) Both (b) and (c). correct?
(a) 1 only
46. The proportion of the total deposits (b) 2 only
commercial banks keep as reserves is (c) Both 1 and 2
referred to as (d) Neither 1 nor 2
(a) Capital Adequacy Ratio
(b) Reserve Deposit Ratio 50. Consider the following statements with
(c) Credit Reserve Ratio reference to the Basel norms:
(d) Currency Deposit Ratio 1. These are international banking
regulations issued by Basel Committee
47. Which of the following are the possible on Banking Supervision (BCBS).
advantages of the monetary system over the 2. Under the norms, Tier 2 capital is more
liquid and considered more secure than
barter system?
Tier 1 capital.
1. Reduction in transactions costs.
3. Basel III norms prescribe the capital
2. Better accounting of transactions.
conservation buffer and the
3. Requires that prices must be negotiated
countercyclical capital buffer to mitigate
for every transaction.
systemic risk.
Select the correct answer using the code
Which of the following statements above are
given below.
correct?
(a) 1 and 2 only
(a) 1 and 3 only
(b) 2 and 3 only (b) 1 and 2 only
(c) 1 and 3 only (c) 2 and 3 only
(d) 1, 2 and 3 (d) 1, 2 and 3
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