Indian Economy Test 82

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Indian Economy Test 82

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following will be the impact on the banking industry in case RBI increases the Bank Rate?

A
Banks will increase their lending rates.

B
Long-term loans in the country will become costlier.

C
banks will decrease the interest which they offer on the time deposits.

D
None of the above.

Solution

Revision in the Bank Rate by RBI today have no impact on the banking industry as lending rates are now linked to 'repos'. Banks need not aligned their lending rates with Bank Rate.
Question 2
1 / -0

Which of the following are incorrect when the Government starts repuchasing its bonds before their maturity periods? Select the answer using the code given below:
1. Promotion of an 'expansionist' monetary policy.
2. An attempt to increase the saving rate of the economy.
3. A tool to check the rising inflation.
4. Promotion to credit creation by the banks.

A
1,2 and 3

B
1,3 and 4

C
2,3 and 4

D
1,2,3 and 4

Solution

The money which flows from the government into the system was called the 'cheap currency' by J.M. Keynes. By doing so governments promote economic activities which supports business and trade.
Question 3
1 / -0

Deposits in few of the NRI accounts in India are not considered as the external debt of the country.
Select the related and correct statement/statements using the code:
1. Deposits in NRO accounts are included in India's external debt.
2. Deposits in the FCNR(B) are not considered as India's external debt.

A
Only 1

B
Only 2

C
1 and 2

D
Neither 1 nor 2

Solution

Deposits in both the NRI accounts-NRO (Non-Resident Ordinary Rupee Account) and Foreign Currency Non-Resident Bank Account [FCNR(B)] are parts of India's external debt.
Question 4
1 / -0

Select the correct statements about derivatives in India, using by the code given below:
1. A security derived from a debt instrument,share,secured or unsecured loan.
2. A contract which derives its value from the prices, or index, of underlying assets.
3. A security derived from exchange rates and interest rates.
4. It may be derived from the monsoon forecasting.

A
1, 2 and 3

B
1, 3 and 4

C
2, 3 and 4

D
1, 2, 3 and 4

Solution

The derivatives in India has not been allowed to derive their value from the weather forcastings (it is allowed in many developed economies, for example, the USA).
Question 5
1 / -0

Select the incorrect statements about 'narrow banking', using the code given below:
1. A banking business in which banks go for short-term risk-free lending.
2. A type of retail banking in which banks provide short-term 'open-ended' loans.
3. When banks prefer short-term 'closed-ended' lending to the corporate sector.
4. A banking collateralised loans to public.

A
1,2 and 3

B
1,3 and 4

C
2,3 and 4

D
1,2,3 and 4

Solution

The terms was coined in India by the Narasimhan Committee - II set up for the Banking Sector Reforms (report came in April 1998). This suggestion was given by the Committee for the 'weak banks' at that time.
Question 6
1 / -0

Select the incorrect statements about the Grain Bank, using the code given below:
1. Run in tribal and non-tribal rural areas by the Ministry of Tribal Affairs and the Ministry of Consumer Affairs, Food and Public Distribution, respectively.
2. Foodgrains can be borrowed from it by mortgaging dwellings.
3. Set up in the food scarce areas, it aims at providing safeguard to all against starvation during natural calamity and lean period.
4.Civil society bodies can also run it.

A
1,2 and 3

B
1,3 and 4

C
2,3 and 4

D
1,2,3 and 4

Solution

Launched in 1996-97 by the Ministry of Tribal Affairs, the centrally sponsored scheme was transferred to the Ministry of Consumer Affairs, Food and Public Distribution in 2004-05. It lends foodgrains without any mortgage to the target population (marginaliged people) only. The bank can be run by NGO's self help group and gram sabha.
Question 7
1 / -0

Farm waste has always been an issue of debate in India-select the correct statement/statements regarding it, using the code given below:
1. In case of the cereals. farm waste is at 8 per cent of the total produce.
2. Around 20 per cent of the fruits and vegetables produced in India are wasted.

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

The latest data were released by the Central Post-Harvest Engineering and Technology (CIPHET), GoI Institute, late 2017.
Question 8
1 / -0

Select the correct statement/statements regarding the process of 'disinflation' in India:
1. Headline inflation falls towards 6 per cent.
2. It leaves similar effects to deflation.

A
Only 1

B
Only 2

C
1 and 2

D
Neither 1 nor 2

Solution

When inflation is beyond the upper limit of the healthy range(i.e., above 6 per cent) and starts falling is the case of disinflation. While in case of deflation, inflation must be falling down below the lower limit of the healthy range(i.e., 2 per cent). Today, CPI (C) is taken as the 'headline inflation' of the country.
Question 9
1 / -0

Select the incorrect statements about the 'ordinary shares' of a limited liability firm, using the code given below:
1. They undertake maximum entrepreneurial risk associated with a business venture.
2. These shares do not avail any voting right in the affairs of the company.
3. If a company is going for closure these shares get their claims after the bank loans have been settled and before the preference shares.
4. Company Law provides them no investment claims in the situations of closures.

A
1,2 and 3

B
1,3 and 4

C
2,3 and 4

D
1,2,3 and 4

Solution

These shares get voting rights in their exact proportion as they cover the maximum risk-in a way it is a compensation. As these shares get dividend after all payments have been made by company, similarly if the company is being closed down they get their investment claims at the last-after settling the claims of employees, creditors, lenders, government preference shares, etc. Thus, both during life and death of a business, the 'ordinary shareholders' are the last to receive their claims.
Question 10
1 / -0

Select the correct statements about the GIC RE, using the code given below:
1. The public sector Reinsurer provides reinsurance support to the life and non-life insurance companies in the country.
2. It also manages Marine Hull Pool, Indian terrorism insurance pool and for commercial vehicle on behalf of Indian insurance industry.
3. It has emerged as a preferred reinsurer in the Afro-Asian region.
4. It is the 3rd largest aviation reinsurer globally.

A
1,2 and 3

B
1,3 and 4

C
2,3 and 4

D
1,2,3 and 4

Solution

It reinsures only 'non-life' segment of the insurance business and is the 5th largest aviation reinsurer in the world. Recently it has been selected as a Manager for Nat Cat Pool promoted by the Federation of Afro-Asian Insurers and Reinsurers (FAIR).
GIC Re is financially strong and is rated 'A' (Excellent) by AM Best and 'AAA' by CARE.

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Re-Attempt Weekly Quiz Competition

Indian Economy Test 82

Result

Indian Economy Test 82

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Rank

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SHARING IS CARING

Question 1

Banks will increase their lending rates.

Long-term loans in the country will become costlier.

banks will decrease the interest which they offer on the time deposits.

None of the above.

Solution

Question 2

1,2 and 3

1,3 and 4

2,3 and 4

1,2,3 and 4

Solution

Question 3

Only 1

Only 2

1 and 2

Neither 1 nor 2

Solution

Question 4

1, 2 and 3

1, 3 and 4

2, 3 and 4

1, 2, 3 and 4

Solution

Question 5

1,2 and 3

1,3 and 4

2,3 and 4

1,2,3 and 4

Solution

Question 6

1,2 and 3

1,3 and 4

2,3 and 4

1,2,3 and 4

Solution

Question 7

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

Question 8

Only 1

Only 2

1 and 2

Neither 1 nor 2

Solution

Question 9

1,2 and 3

1,3 and 4

2,3 and 4

1,2,3 and 4

Solution

Question 10

1,2 and 3

1,3 and 4

2,3 and 4

1,2,3 and 4

Solution

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