You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Average score
Your score
Categories
Not categorized0%
Your result has been entered into leaderboard
Loading
1
2
3
4
5
6
7
8
9
10
Answered
Review
Question 1 of 10
1. Question
2 points
With reference to the Indian economy, consider the following
(1) Bank rate
(2) Open market operations
(3) Public debt
(4) Public revenue
Which of the above is/are component/ components of Monetary Policy?
Correct
Public debt is not part of Monetary Policy and OMOs together with CRR, SLR, Repo, Reverse Repo by RBI are certainly a part of their monetary policy. So answer should be option (c).
Incorrect
Public debt is not part of Monetary Policy and OMOs together with CRR, SLR, Repo, Reverse Repo by RBI are certainly a part of their monetary policy. So answer should be option (c).
Question 2 of 10
2. Question
2 points
There has been a persistent deficit budget year after year. Which action/actions of the following can be taken by the Government to reduce the deficit?
(1) Reducing revenue expenditure
(2) Introducing new welfare schemes
(3) Rationalizing subsidies
(4) Reducing import duty
Select the correct answer using the code given below.
Correct
Budget deficit is used to define a status of financial health in which expenditures exceed revenue. Reducing the revenue expenditure will certainly help in bridging the gap. Subsidies are a part of expenditure and rationalizing them would reduce the deficit.
Incorrect
Budget deficit is used to define a status of financial health in which expenditures exceed revenue. Reducing the revenue expenditure will certainly help in bridging the gap. Subsidies are a part of expenditure and rationalizing them would reduce the deficit.
Question 3 of 10
3. Question
2 points
Global Financial Stability Report’ is prepared by the
Correct
IMF releases global financial stability report.
Incorrect
IMF releases global financial stability report.
Question 4 of 10
4. Question
2 points
What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’?
(1) It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
(2) It will drastically reduce the ‘Current Account Deficit’ of India and will enable it to increase its foreign exchange reserves.
(3) It will enormously increase the growth and size of the economy of India and will enable it to overtake China in the near future.
Select the correct answer using the code given below:
Correct
It will create a single market in India by merging five central and eight state taxes. Although it will have positive effects on India’s exports, current account deficit and its size also.
But it will not drastically reduce the current account deficit.
Incorrect
It will create a single market in India by merging five central and eight state taxes. Although it will have positive effects on India’s exports, current account deficit and its size also.
But it will not drastically reduce the current account deficit.
Question 5 of 10
5. Question
2 points
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
Correct
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if poverty and unemployment also increase, because this means the growth is not inclusive. The benefits of economic development are not reaped by many and growth inequality will rise.
Incorrect
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if poverty and unemployment also increase, because this means the growth is not inclusive. The benefits of economic development are not reaped by many and growth inequality will rise.
Question 6 of 10
6. Question
2 points
Which one of the following statements correctly describes the meaning of legal tender money ?
Correct
Legal tender is any official medium of payment recognized by law that can be used to extinguish a public or private debt, or meet a financial obligation. A creditor is obligated to accept legal tender toward repayment of a debt. Legal tender can only be issued by the national body that is authorized to do so.
Incorrect
Legal tender is any official medium of payment recognized by law that can be used to extinguish a public or private debt, or meet a financial obligation. A creditor is obligated to accept legal tender toward repayment of a debt. Legal tender can only be issued by the national body that is authorized to do so.
Question 7 of 10
7. Question
2 points
Which of the following is not included in the assets of a commercial bank in India?
Correct
Deposit is not an asset of a commercial bank, it is a liability of the bank since it has to returned the deposit of customers when demanded in case of saving or current account or on the maturity of the date in case of fixed deposit.
while the remaining options are an asset for the banks, because it earned them interest
Incorrect
Deposit is not an asset of a commercial bank, it is a liability of the bank since it has to returned the deposit of customers when demanded in case of saving or current account or on the maturity of the date in case of fixed deposit.
while the remaining options are an asset for the banks, because it earned them interest
Question 8 of 10
8. Question
2 points
With reference to India’s Five-Year Plans, which of the following statements is/are correct?
(1) From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
(2) The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
(3) In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.
Select the correct answer using the code given below.
Correct
Derived from Russia, India used the concept of ‘Five Year Plan’ for economic planning. With first five year plan launched in 1951, India now has a total of 12 such plans. However, the practice was called off in 2017 by the Narendra Modi-led NDA government. The Second Plan focused on the industrial development of the country and stressed capital goods industries. The Fourth Plan was focussed on growth with stability and progressive achievement of self reliance. The plan focussed on eliminating poverty with slogan of “Garibi Hatao” given during the 1971 elections by Indira Gandhi. The Fifth Plan gave top priority to agriculture, employment, and poverty
Incorrect
Derived from Russia, India used the concept of ‘Five Year Plan’ for economic planning. With first five year plan launched in 1951, India now has a total of 12 such plans. However, the practice was called off in 2017 by the Narendra Modi-led NDA government. The Second Plan focused on the industrial development of the country and stressed capital goods industries. The Fourth Plan was focussed on growth with stability and progressive achievement of self reliance. The plan focussed on eliminating poverty with slogan of “Garibi Hatao” given during the 1971 elections by Indira Gandhi. The Fifth Plan gave top priority to agriculture, employment, and poverty
Question 9 of 10
9. Question
2 points
Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?
Correct
Curbing imports of non essential goods will lessen the demand for dollars and promoting export will help in increasing the flow of dollars into the country – helping control rupee depriciation.
ii. The Masala bond is directly pegged to the Indian Currency. If Indian borrowers issues more rupee denominated Masala bonds, this would increase liquidity in the market or increase in the rupee stock against few currencies in the market and this would help in supporting the rupee.
iii.ECB- it is a type of loan in foreign currencies, made by non-resident lenders. Thus easing conditions of ECB’s helps in receiving more loans in foreign currencies that would in increase of forex inflow – leading to rupee appreciation.
iv. Expansionary Monetary Policy- A set of policy measures such as increase in money supply by the RBI to stimulate economy. It cannot influece the variations of rupee value.
Incorrect
Curbing imports of non essential goods will lessen the demand for dollars and promoting export will help in increasing the flow of dollars into the country – helping control rupee depriciation.
ii. The Masala bond is directly pegged to the Indian Currency. If Indian borrowers issues more rupee denominated Masala bonds, this would increase liquidity in the market or increase in the rupee stock against few currencies in the market and this would help in supporting the rupee.
iii.ECB- it is a type of loan in foreign currencies, made by non-resident lenders. Thus easing conditions of ECB’s helps in receiving more loans in foreign currencies that would in increase of forex inflow – leading to rupee appreciation.
iv. Expansionary Monetary Policy- A set of policy measures such as increase in money supply by the RBI to stimulate economy. It cannot influece the variations of rupee value.
Question 10 of 10
10. Question
2 points
If the RBI decides to adopt an expansionist monetary policy, which of the following would it not do?
(1) Cut and optimize the Statutory Liquidity Ratio
(2) Increase the Marginal Standing Facility Rate
(3) Cut the Bank Rate and Repo Rate
Select the correct answer using the code given below:
Correct
Expansionary policy is proceeded by RBI in order to relax interest norms and to facilitate more liquidity in the market to boost the economy. It increased the purchasing power of employees. It is also referred to as ‘easy-moderate policy’.
Contractionary Monetary Policy- it slows the rate of growth in the money supply or outright decreases tThe incorrect statement is Following an expansionary monetary policy. Curbing imports of non-essential goods and promoting exports would help control imports and thus the depreciation of the rupee by increasing the growth with promoting exports. Hence statement 1 is correct.
Encouraging Indian borrowers to issue rupee-denominated Masala Bonds is a measure of the RBI/government to stop the slide of Indian rupee as it does not put pressure on our currency through borrowing dollars as the bond issue would be rupee denominated. Hence statement 2 is correct.
Easing conditions relating to external commercial borrowing will lead to higher borrowing abroad and would temporarily reduce the deficit of forex in India preventing the slide of rupee. Hence statement 3 is correct.
Following an expansionary monetary policy may lead to lower interest rates thereby increasing the inflation with higher imports through higher spending of the government and therefore the slide of rupee takes place. Hence Option 4 is not a measure taken by the government/RBI to stop the slide of Indian Rupee. Hence statement 4 is not correct.he money supply in order to control inflation. When a central bank tries to expand the overall money supply to boost the economy, then it is called as Accommodative Monetary Policy.
Incorrect
Expansionary policy is proceeded by RBI in order to relax interest norms and to facilitate more liquidity in the market to boost the economy. It increased the purchasing power of employees. It is also referred to as ‘easy-moderate policy’.
Contractionary Monetary Policy- it slows the rate of growth in the money supply or outright decreases tThe incorrect statement is Following an expansionary monetary policy. Curbing imports of non-essential goods and promoting exports would help control imports and thus the depreciation of the rupee by increasing the growth with promoting exports. Hence statement 1 is correct.
Encouraging Indian borrowers to issue rupee-denominated Masala Bonds is a measure of the RBI/government to stop the slide of Indian rupee as it does not put pressure on our currency through borrowing dollars as the bond issue would be rupee denominated. Hence statement 2 is correct.
Easing conditions relating to external commercial borrowing will lead to higher borrowing abroad and would temporarily reduce the deficit of forex in India preventing the slide of rupee. Hence statement 3 is correct.
Following an expansionary monetary policy may lead to lower interest rates thereby increasing the inflation with higher imports through higher spending of the government and therefore the slide of rupee takes place. Hence Option 4 is not a measure taken by the government/RBI to stop the slide of Indian Rupee. Hence statement 4 is not correct.he money supply in order to control inflation. When a central bank tries to expand the overall money supply to boost the economy, then it is called as Accommodative Monetary Policy.