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Question 1 of 10
1. Question
2 points
If the total size of the economy is growing year after year, it implies that
1.GDP growth rate must be increasing steadily year after year.
2.Gross Capital formation in the economy must be increasing year after year.
Which of the above statements is/are incorrect?
Correct
GDP at market prices calculates total value of goods and services produced within a year at market prices.
If it increases, it means entrepreneurs have decided to produce more goods and services.
Incorrect
GDP at market prices calculates total value of goods and services produced within a year at market prices.
If it increases, it means entrepreneurs have decided to produce more goods and services.
Question 2 of 10
2. Question
2 points
Consider the following statements regarding Incremental Capital-Output Ratio (ICOR).
1.The incremental capital output ratio (ICOR) denotes the relationship between the level of investment made in the economy and the consequent increase in the gross domestic product (GDP).
2.The higher the ICOR, the higher the productivity of capital.
3.In the last ten years, the ICOR has seen substantial decline in India.
Which of the above statements is/are correct?
Correct
The Incremental Capital-Output Ratio (ICOR) is the ratio of investment to growth which is equal to the reciprocal of the marginal product of capital. The higher the ICOR, the lower the productivity of capital or the marginal efficiency of capital. The ICOR can be thought of as a measure of the inefficiency with which capital is used.
Incorrect
The Incremental Capital-Output Ratio (ICOR) is the ratio of investment to growth which is equal to the reciprocal of the marginal product of capital. The higher the ICOR, the lower the productivity of capital or the marginal efficiency of capital. The ICOR can be thought of as a measure of the inefficiency with which capital is used.
Question 3 of 10
3. Question
2 points
Which of the following expenditure by the Government are considered as Transfer payments?
1.Universal Basic Income.
2.Subsidies paid to farmers
3.Conditional cash transfers
Select the correct answer code:
Correct
Expenditure like pensions, scholarships and UBI are direct transfers of money and do not create any output. They are called Transfer payments. They are one-way payment of money for which no good or service is received in exchange. Transfer payments may be conditional cash transfers or unconditional cash transfers.
Incorrect
Expenditure like pensions, scholarships and UBI are direct transfers of money and do not create any output. They are called Transfer payments. They are one-way payment of money for which no good or service is received in exchange. Transfer payments may be conditional cash transfers or unconditional cash transfers.
Question 4 of 10
4. Question
2 points
Which of the following is/are part of the Personal Disposable Income?
1.Non-tax Payments such as fines
2.Corporate Tax.
3.Personal Tax Payments.
4.Net Interest payments made by households
Select the correct answer code:
Correct
None of them are part of Personal Disposable Income.
Incorrect
None of them are part of Personal Disposable Income.
Question 5 of 10
5. Question
2 points
Consider the following statements regarding GDP deflator.
1.GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.
2.Unlike the CPI, the GDP deflator is not based on a fixed basket of goods and services.
3.When GDP deflator is negative, it necessarily means that there is inflation in the economy.
Which of the above statements is/are correct?
Correct
In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.
Incorrect
In economics, the GDP deflator is a measure of the level of prices of all new, domestically produced, final goods and services in an economy in a year.
Question 6 of 10
6. Question
2 points
With reference to the government expenditure in India, which of the following constitutes Transfer Payments?
1.The payments which are made by the government to its employees.
2.The Interest payments made to foreign countries on loans taken.
3.The payments which are made as financial aid in a social welfare programme.
Select the correct answer code:
Correct
In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.
Incorrect
In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output. Examples of transfer payments include welfare, financial aid, social security, and government subsidies for certain businesses.
Question 7 of 10
7. Question
2 points
Consider the following statements regarding Off-budget borrowing.
1.Off-budget borrowings are loans taken by any public institution on the directions of the central government.
2.Off-budget borrowing helps keep the country’s fiscal deficit within acceptable limits.
3.Off-budget financing is not part of the calculation of the fiscal indicators and does not have any fiscal implications.
4.Public sector banks can fund off-budget expenses.
Which of the above statements is/are correct?
Correct
Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution which borrows on the directions of the central government. Such borrowings are used to fulfil the government’s expenditure needs.
Incorrect
Off-budget borrowings are loans that are taken not by the Centre directly, but by another public institution which borrows on the directions of the central government. Such borrowings are used to fulfil the government’s expenditure needs.
Question 8 of 10
8. Question
2 points
Consider the following statements regarding Anti-Dumping Duty.
1.An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value.
2.In India, Directorate General of Trade Remedies (DGTR), under the Ministry of Commerce & Industry conducts anti-dumping investigations.
Which of the above statements is/are correct?
Correct
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.
Incorrect
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process wherein a company exports a product at a price that is significantly lower than the price it normally charges in its home (or its domestic) market.
Question 9 of 10
9. Question
2 points
Consider the following statements regarding Non-Banking Financial Companies (NBFCs).
1.All the NBFCs are regulated by RBI.
2.The designation of ‘Systematically Important’ is applicable for Banks and not for NBFCs.
Which of the above statements is/are correct?
Correct
Solution: d)
Incorrect
Solution: d)
Question 10 of 10
10. Question
2 points
Teaser loan, sometimes seen in news means
Correct
Teaser loans are those which charge comparatively lower rates of interest in the first few years after which the rates are increased.
Incorrect
Teaser loans are those which charge comparatively lower rates of interest in the first few years after which the rates are increased.