About this quiz
Three-pillar economy, public enterprises, private sector, PPP and cooperatives.
This Lok Sewa practice set has 52 multiple-choice questions (Subject: Economics · For: Nayab Subba, Kharidar, Section Officer · Level: Medium). Take the quiz above first; after that, use the study list below to revise every question with its correct answer and a short explanation.
Study list: all 52 questions with answers and explanations
Nepal's three-pillar economic policy includes which sectors?
- A) Public, private and cooperative ✔
- B) Public, foreign and military
- C) Private, religious and family
- D) Agriculture, industry and services only
Why: Nepal's economic policy rests on three pillars: the public (government), private and cooperative sectors working together for development.
Which Article sets the objective of development through the public, private and cooperative sectors?
- A) Article 50(3) ✔
- B) Article 76
- C) Article 119
- D) Article 242
Why: Article 50(3), in the Directive Principles, aims for a socialism-oriented, independent economy through the participation of the public, private and cooperative sectors.
In Nepali, public enterprise is:
- A) सार्वजनिक संस्थान ✔
- B) निजी कम्पनी
- C) सहकारी संस्था
- D) गैरसरकारी संस्था
Why: Public enterprise in Nepali is सार्वजनिक संस्थान: a business owned (wholly or mostly) by the government.
Which is a public enterprise?
- A) Nepal Electricity Authority ✔
- B) A private hotel
- C) A savings cooperative
- D) FNCCI
Why: Nepal Electricity Authority is owned by the government, so it is a public enterprise. It generates, transmits and distributes electricity.
Nepal Oil Corporation is a:
- A) Public enterprise ✔
- B) Private company
- C) Cooperative
- D) Foreign NGO
Why: Nepal Oil Corporation is a state-owned public enterprise with the sole right to import and distribute petroleum products in Nepal.
A main role of the public sector is to:
- A) Build infrastructure and serve remote areas ✔
- B) Maximise private profit only
- C) Avoid all services
- D) Replace all private business
Why: The public sector builds infrastructure (roads, power, water) and serves remote areas where private firms may not find a profit.
A common problem of public enterprises in Nepal is:
- A) Losses due to political interference and weak management ✔
- B) Too much profit
- C) No staff
- D) Perfect efficiency
Why: Many public enterprises make losses because of political interference in appointments, overstaffing and weak management.
Nepal's Privatisation Act was made in:
- A) 2050 BS ✔
- B) 2074 BS
- C) 2013 BS
- D) 2075 BS
Why: The Privatisation Act, 2050 BS gave the legal basis for selling or handing over government enterprises to the private sector, after the liberal policy of the 2040s.
The private sector mainly works for:
- A) Profit ✔
- B) Only charity
- C) Only government orders
- D) Military purposes
Why: The private sector is run by individuals and companies mainly for profit, though it also creates jobs and pays taxes.
Which is a role of the private sector?
- A) Investment, employment and innovation ✔
- B) Making laws
- C) Running courts
- D) Conducting elections
Why: The private sector brings investment, creates employment and drives innovation through competition.
FNCCI stands for:
- A) Federation of Nepalese Chambers of Commerce and Industry ✔
- B) Foreign Nepal Credit Cooperative Institution
- C) Federal National Council of Civil Industries
- D) Fund for Nepal Cottage and Craft Industries
Why: FNCCI is the Federation of Nepalese Chambers of Commerce and Industry, the main umbrella body of Nepal's private sector.
CNI stands for:
- A) Confederation of Nepalese Industries ✔
- B) Council of National Investment
- C) Cooperative Network of India
- D) Central Nepal Institute
Why: CNI is the Confederation of Nepalese Industries, an organisation representing large industries and businesses.
PPP stands for:
- A) Public-Private Partnership ✔
- B) Private Profit Plan
- C) People's Power Party
- D) Public Property Programme
Why: PPP means Public-Private Partnership: government and private companies jointly invest in and run projects such as roads or hydropower.
The Public-Private Partnership and Investment Act was made in:
- A) 2075 BS ✔
- B) 2050 BS
- C) 2063 BS
- D) 2081 BS
Why: The Public-Private Partnership and Investment Act, 2075 BS sets rules for PPP projects and for large investments through Investment Board Nepal.
Which body facilitates large investment projects in Nepal?
- A) Investment Board Nepal ✔
- B) Election Commission
- C) PSC
- D) CIAA
Why: Investment Board Nepal (IBN), chaired by the Prime Minister, facilitates large and foreign investment projects such as big hydropower plants.
A problem faced by the private sector is:
- A) Policy instability and high cost of doing business ✔
- B) Too much electricity
- C) No market at all
- D) Free labour
Why: Frequent policy changes, red tape, power and transport costs and labour problems raise the cost of doing business.
In Nepali, cooperative sector is:
- A) सहकारी क्षेत्र ✔
- B) निजी क्षेत्र
- C) सार्वजनिक क्षेत्र
- D) विदेशी क्षेत्र
Why: Cooperative sector in Nepali is सहकारी क्षेत्र.
A cooperative is controlled:
- A) Democratically by its members ✔
- B) By one rich owner
- C) By the army
- D) By foreign investors only
Why: A cooperative is controlled democratically by its members: each member has one vote, whatever the size of their share.
The first cooperative of Nepal was set up in:
- A) Chitwan (Bakhan) in 2013 BS ✔
- B) Kathmandu in 2046 BS
- C) Pokhara in 2030 BS
- D) Biratnagar in 2007 BS
Why: Nepal's first cooperative, Bakhan Saving and Credit Cooperative, was set up in Chitwan in 2013 BS for people resettled in the Rapti valley.
The current Cooperative Act of Nepal is of:
- A) 2074 BS ✔
- B) 2048 BS
- C) 2013 BS
- D) 2063 BS
Why: The Cooperative Act, 2074 BS is the current law. It replaced the Cooperative Act, 2048 after federalism.
Cooperatives at federal level are regulated by the:
- A) Department of Cooperatives ✔
- B) Department of Customs
- C) Nepal Army
- D) Election Commission
Why: The Department of Cooperatives regulates federal-level cooperatives. Provinces and local levels register and regulate cooperatives in their own areas.
The ministry responsible for cooperatives is the Ministry of:
- A) Land Management, Cooperatives and Poverty Alleviation ✔
- B) Defence
- C) Foreign Affairs
- D) Tourism
Why: The Ministry of Land Management, Cooperatives and Poverty Alleviation is responsible for cooperative policy at the federal level.
National Cooperative Day in Nepal is on:
- A) Asar 21 ✔
- B) Bhadra 22
- C) Magh 1
- D) Baisakh 1
Why: National Cooperative Day is celebrated on Asar 21 every year.
How many cooperative principles are given by the ICA?
- A) 7 ✔
- B) 5
- C) 10
- D) 3
Why: The International Co-operative Alliance (ICA) gives 7 principles: voluntary membership, democratic control, member economic participation, autonomy, education, cooperation among cooperatives, and concern for community.
Which is a cooperative principle?
- A) Voluntary and open membership ✔
- B) Profit for one owner
- C) Closed secret membership
- D) Government control
Why: Voluntary and open membership is ICA principle 1: anyone who can use the services and accept the duties can join, without discrimination.
"One member, one vote" reflects:
- A) Democratic member control ✔
- B) Autonomy
- C) Education
- D) Concern for community
Why: 'One member, one vote' reflects ICA principle 2, democratic member control.
Cooperatives working together at district and national levels follow the principle of:
- A) Cooperation among cooperatives ✔
- B) Profit maximisation
- C) Competition only
- D) Isolation
Why: Forming district, provincial and national unions follows ICA principle 6, cooperation among cooperatives.
Spending on local welfare by a cooperative reflects:
- A) Concern for community ✔
- B) Autonomy
- C) Profit only
- D) Closed membership
Why: Spending on local welfare, such as schools or health camps, reflects ICA principle 7, concern for community.
A recent problem of some savings-and-credit cooperatives in Nepal is:
- A) Misuse of members' savings ✔
- B) Too much supervision
- C) Excess government funding
- D) No members
Why: Some savings-and-credit cooperatives misused members' savings and could not return deposits, which led to protests and investigations.
Dairy, agriculture and savings cooperatives are examples of:
- A) Types of cooperatives ✔
- B) Public enterprises
- C) Foreign companies
- D) Ministries
Why: Dairy, agriculture, savings-and-credit and consumer cooperatives are different types of cooperatives, grouped by the work they do.
The main strength of the public sector is:
- A) Equity and essential services ✔
- B) Profit
- C) Speculation
- D) Monopoly for private gain
Why: The public sector gives equity: it provides essential services like electricity, water and health to everyone, including poor and remote people.
The main strength of the private sector is:
- A) Efficiency and innovation ✔
- B) Equity only
- C) Charity
- D) Regulation
Why: The private sector's strength is efficiency and innovation, because competition and profit push firms to cut costs and improve quality.
The main strength of the cooperative sector is:
- A) Community participation and support to small savers ✔
- B) Large foreign investment
- C) Military support
- D) Tax collection
Why: The cooperative sector's strength is community participation and support for small savers and producers, especially in villages.
The three-pillar policy aims for:
- A) Growth with equity ✔
- B) Only private profit
- C) Only state control
- D) No development
Why: Combining the public sector's equity, the private sector's efficiency and cooperatives' participation aims for growth with equity.
Nepal Telecom is a:
- A) Public enterprise (majority government-owned) ✔
- B) Cooperative
- C) NGO
- D) Ministry
Why: Nepal Telecom is a public enterprise: the government owns the majority of its shares, while a small share is held by the public.
Rastriya Banijya Bank is a:
- A) Government-owned bank ✔
- B) Cooperative
- C) Foreign bank
- D) Microfinance only
Why: Rastriya Banijya Bank is fully government-owned, making it Nepal's largest state-owned commercial bank and a public enterprise.
PPP projects share:
- A) Investment and risk between government and private companies ✔
- B) Only risk with citizens
- C) Nothing
- D) Only government money
Why: In PPP projects, government and private companies share investment, risk and returns, for example in toll roads or hydropower.
Autonomy and independence in cooperatives means:
- A) Members control the cooperative, not outsiders ✔
- B) Government controls it
- C) Banks control it
- D) Political parties control it
Why: Autonomy (ICA principle 4) means cooperatives are self-governing and controlled by members, not by government or outside lenders.
Education, training and information is a principle that helps:
- A) Members and staff run the cooperative well ✔
- B) Hide accounts
- C) Avoid meetings
- D) Remove members
Why: ICA principle 5, education, training and information, helps members, leaders and staff run the cooperative well.
Which body represents cottage and small industries?
- A) Federation of Nepal Cottage and Small Industries ✔
- B) FNCCI only
- C) PSC
- D) NRB
Why: The Federation of Nepal Cottage and Small Industries (FNCSI) represents cottage and small industry owners.
Public enterprises often serve remote areas because:
- A) Private firms may not find it profitable ✔
- B) Remote areas have no people
- C) It is illegal for private firms
- D) Remote areas pay more
Why: Private firms may not find remote areas profitable, so public enterprises fill the gap to give everyone services.
Socialism-oriented economy is mentioned as a goal in:
- A) The Constitution of Nepal ✔
- B) Company Act only
- C) Customs Act
- D) Bank rules
Why: The Constitution of Nepal (Preamble and Article 50) aims to build a socialism-oriented economy.
Overstaffing in public enterprises leads to:
- A) High costs and losses ✔
- B) More profit
- C) Lower costs
- D) Better service always
Why: Too many staff raise salary costs without more output, causing high costs and losses.
Performance contracts with public enterprises aim to:
- A) Improve accountability for results ✔
- B) Increase losses
- C) Remove targets
- D) Close all enterprises
Why: Performance contracts set targets for managers and link them to results, which improves accountability.
Which sector is most closely associated with farmers' collective marketing?
- A) Cooperative sector ✔
- B) Public enterprises
- C) Foreign investment
- D) Military
Why: Producer cooperatives, such as dairy and vegetable cooperatives, let farmers sell together and get better prices, which is the cooperative sector.
A microfinance institution mainly serves:
- A) Low-income people with small loans ✔
- B) Large industries only
- C) Government ministries
- D) Foreign embassies
Why: Microfinance institutions give small loans and savings services to low-income people, often women, who lack access to banks.
The cooperative sector helps financial inclusion by:
- A) Reaching small savers in villages ✔
- B) Serving only cities
- C) Charging extreme interest
- D) Avoiding members
Why: Cooperatives reach small savers in villages where bank branches are few, bringing more people into the financial system.
Investment Board Nepal was set up to:
- A) Facilitate large and foreign investment projects ✔
- B) Run elections
- C) Regulate schools
- D) Audit accounts
Why: Investment Board Nepal was set up to facilitate large and foreign investment projects, with one-window help for approvals.
Which is NOT one of the three pillars?
- A) Military sector ✔
- B) Public sector
- C) Private sector
- D) Cooperative sector
Why: The three pillars are public, private and cooperative. The military is not an economic sector.
Nepal Airlines Corporation is a:
- A) Public enterprise ✔
- B) Private airline
- C) Cooperative
- D) Foreign company
Why: Nepal Airlines Corporation, the national flag carrier, is a state-owned public enterprise.
Weak supervision of cooperatives can lead to:
- A) Loss of members' savings ✔
- B) More savings
- C) Higher trust
- D) Better governance
Why: Without proper checks, leaders can misuse funds, so members can lose their savings.
Periodic plans of Nepal describe development through:
- A) Public, private and cooperative participation ✔
- B) Only foreign aid
- C) Only the army
- D) Only households
Why: Nepal's periodic plans describe development through public, private and cooperative participation: the three-pillar approach.