1. The phrase "bad money drives out good" relates to which of the following laws?
a) Grimm’s law
b) Gresham’s law
c) Wagner’s law
d) Keynes’ law
In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation. Therefore, the correct answer is b.
2. Which of the following best describes the terms 'Sreni', 'Nigama', 'Puga', used during ancient period?
a) Corporate organizations
b) Types of coins
c) Categories of agriculture lands
d) Educational centres
The literary and the archaeological sources of the ancient period refer to certain terms such as Vaisya, Sreni, nigama, gama, puga Sarthavahas Vrata Kula, Jdti, Vanik, Setthis, Gahapati and samgho, which may help us in studying about different constituent elements of corporate Organisation. In Panini’s Astadhyayi there are terms such as, puga, vrata and samgha which bear some cooperative connotation but they have more political and administrative significance rather than economic.
Therefore, the correct answer is a.
3. Consider the following statements regarding the Shanghai Cooperation Organisation (SCO):
1. It is a Eurasian political, economic, and military organization, with a secretariat based in Shanghai, China.
2. Member States include China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, Turkmenistan, Mongolia, India and Pakistan.
Which of the statements given above are correct?
a. 1 only
b. 2 only
c. Both 1 and 2
d. Neither 1 nor 2
The Shanghai Cooperation Organisation (SCO) is a permanent intergovernmental international organization. The Secretariat of SCO is based in Beijing, China. So, statement 1 is not correct. The SCO comprises eight member states, namely the Republic of India, the Republic of Kazakhstan, the People's Republic of China, the Kyrgyz Republic, the Islamic Republic of Pakistan, the Russian Federation, the Republic of Tajikistan, and the Republic of Uzbekistan. So, statement 2 is not correct.
Therefore, the correct answer is d.
4. Which of the following is/are features of a centrally planned economy?
1. All the means of production are owned and controlled by the government and run in the interest of the workers.
2. The decision of what, how and for whom to produce is decided through the price mechanism.
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
A centrally planned economy is an economy where decisions on what to produce, how to produce and for whom are taken by the government in a centrally managed bureaucracy. Central planning is also referred to as a ‘Command economy’ or ‘Communist economy.’ With Central planning, the theory is that the government will take ownership of the means of production and run the economy in the interest of workers. The theoretical basis of a planned economy stems from the work of Karl Marx. So, statement 1 is correct.
In theory, a Centrally planned economy can overcome market failure and achieve equality of distribution. Supporters of centrally planned economy argue that when economic decisions are left to the free market – monopolies emerge to exploit consumers. Furthermore, the Capitalists (those who own private property) can earn money through exploiting the labour of others. A centrally planned economy allows a fair distribution to all and not just the capitalist class. The decision of what, how and for whom to produce is decided by Central Planning authority in Central Planned Economy. So, statement 2 is not correct.
Therefore, the correct answer is a.
5. Consider the following statements with reference to Minimum Alternate Tax:
1. It is the minimum amount of tax required to be paid by a company, in case its normal tax liability after claiming deductions goes beyond a certain limit.
2. This limit is calculated as a certain percentage (MAT rate) of the company’s book profit.
Which of the statements given above is/are not correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Minimum Alternate Tax is a provision in Direct tax laws to limit tax exemptions availed by companies, so that they pay at least a minimum amount of corporate tax to the government. Thus, it is the minimum amount of tax required to be paid by a company, in case its normal tax liability after claiming deductions falls below a certain limit. So, Statement (1) is not correct.
MAT is equal to 18.5% (15% from AY 2020-21) of Book profits (Plus Surcharge and cess as applicable). Book profit means the net profit as shown in the profit & loss account for the year. So, Statement (2) is correct. Therefore, the answer is a.