Indian Economy Test 38

Result

Indian Economy Test 38

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Weekly Quiz Competition

Question 1
1 / -0

Consider the following the statements:
The price of any currency in international market is decided by the
1) World Bank.
2) demand for goods/services provided by the country concerned.
3) stability of the government of the concerned country.
4) economic potential of the country in question.
Which of the statement(s) given above is/are correct?

A
1, 2, 3 and 4

B
2 and 3

C
3 and 4

D
1 and 4

Solution

The price of any currency is international market is determined by the forces of demand and supply. Demand for a currency increases if the demand for the goods and services provided by that country increases. Moreover, a stable Govt gives confidence to investors and raises the demand for currency of that country.
Question 2
1 / -0

Which one of the following is emerged as a major instrument of Monetary Policy in the Indian economy?

A
Liquidity Adjustment Facility

B
Commercial Papers

C
Treasury Bills

D
None of the above

Solution

Liquidity Adjustment Facility (LAF) is a tool used by the RBI to manage short term liquidity or money supply in the market. LAF helps banks to quickly borrow money in case of emergency or for adjusting in their SLR/CRR requirements.
Question 3
1 / -0

With reference to Okun's law, consider the following statements
1. A one point increase in the unemployment rate is associated with two percentage points of negative growth in real GDP.
2. High employment in an economy leads to losses in a country's production.
Which of the statements given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2
Question 4
1 / -0

Consider the following statements with regard to SLR:
1) To meet SLR, commercial banks can use cash only.
2) SLR is maintained by the banks with themselves.
3) SLR restricts the banks leverage in pumping more money into the economy.
Which of the statement(s) given above is/are correct?

A
1 and 2

B
1 and 3

C
2 and 3

D
Only 2

Solution

Statutory Liquidity Ratio (SLR) refers to the percentage of money which the banks have to set aside and invest in gold or RBI approved securities. It is maintained by the banks with themselves and restricts the banks' leverage in pumping more money into the economy.
Question 5
1 / -0

Which of the following factors of an economy is/are related with Stagflation?
1. Low unemployment rate
2. High unemployment rate
3. High inflation rate
4. Low inflation rate
Select the correct answers using the codes given below?

A
1 and 3

B
1 and 4

C
2 and 3

D
2 and 4
Question 6
1 / -0

As per the recent report published in newspapers/magazines, India ranks at a l-power level in Hunger Index. The Hunger Index is measured on which of the following indicators?
1. Number of people who are calories- deficient
2. Child malnutrition
3. Rate of child mortality
Which of the statements given above is/are correct?

A
1 and 2

B
1 and 3

C
Only 2

D
All of the above
Question 7
1 / -0

Which one among the following is the precious metal (Gold) or other approved securities that a commercial bank must maintain as reserves other than the cash with RBI?

A
Cash Reserve Requirement

B
Statutory Liquidity Requirement

C
Forward Fund

D
Reserve Money

Solution

Statutory Liquidity Ratio (SLR) refers to the percentage of money which the banks have to set aside and invest in gold or RBI approved securities. It is maintained by the banks with themselves and restricts the banks' leverage in pumping more money into the economy.
Question 8
1 / -0

Government of India, for the first time, nationalised 14 large commercial banks in the year _______.

A
1956

B
1959

C
1969

D
1963

Solution

The 14 largest commercial banks in India were nationalised in July 1969. These 14 banks together had 85% of the country's deposits. The move was aimed at extending credit facilities to all sections of the economy and promote financial inclusion.
Question 9
1 / -0

Which one of the following countries has the highest percentage share of services sector in the country's GDP?

A
China

B
Japan

C
Brazil

D
India

Solution

Among the countries mentioned, services sector forms the greatest contributor to GDP in Japan where about 71.4% of the contribution is made by services. Among countries across the globe, France takes the lead with 79.8% contribution by the services sector.
Question 10
1 / -0

The Reserve Bank of India regulates the commercial banks in matters of:
1) liquidity of assets
2) branch expansion
3) merger of banks
4) winding-up of banks
Select the correct answer using the codes given below.

A
1 and 4

B
2, 3 and 4

C
1, 2 and 3

D
1, 2, 3 and 4

Solution

RBI is called the banker's bank and regulates the banking sector in India. By using mechanisms like CRR, SLR etc, it keeps a check on liquidity of assets of the banks. Moreover, RBI also sets rules and regulations concerning merger of banks, their winding-up operations and branch expansion.

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Re-Attempt Weekly Quiz Competition

Indian Economy Test 38

Result

Indian Economy Test 38

Score

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Rank

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SHARING IS CARING

Question 1

1, 2, 3 and 4

2 and 3

3 and 4

1 and 4

Solution

Question 2

Liquidity Adjustment Facility

Commercial Papers

Treasury Bills

None of the above

Solution

Question 3

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Question 4

1 and 2

1 and 3

2 and 3

Only 2

Solution

Question 5

1 and 3

1 and 4

2 and 3

2 and 4

Question 6

1 and 2

1 and 3

Only 2

All of the above

Question 7

Cash Reserve Requirement

Statutory Liquidity Requirement

Forward Fund

Reserve Money

Solution

Question 8

1956

1959

1969

1963

Solution

Question 9

China

Japan

Brazil

India

Solution

Question 10

1 and 4

2, 3 and 4

1, 2 and 3

1, 2, 3 and 4

Solution

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