QUIZ – 2019: Insights Static Quiz, 07 December 2019
INSIGHTS CURRENT EVENTS QUIZ 2019
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The following Quiz is based on the Hindu, PIB and other news sources. It is a current events based quiz. Solving these questions will help retain both concepts and facts relevant to UPSC IAS civil services exam.
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Question 1 of 5
1. Question
1 pointsThe Laffer Curve is the representation of
Correct
Solution: c)
The Laffer Curve is a theory developed by supply-side economist Arthur Laffer to show the relationship between tax rates and the amount of tax revenue collected by governments. The curve is used to illustrate Laffer’s argument that sometimes-cutting tax rates can increase total tax revenue.
Incorrect
Solution: c)
The Laffer Curve is a theory developed by supply-side economist Arthur Laffer to show the relationship between tax rates and the amount of tax revenue collected by governments. The curve is used to illustrate Laffer’s argument that sometimes-cutting tax rates can increase total tax revenue.
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Question 2 of 5
2. Question
1 pointsA ‘wilful default’ would be deemed to have occurred if which of the following events.
- Defaulting in meeting its repayment obligations to the lender even when it has the capacity to repay.
- Not utilising the finance from the lender for the specific purposes for which finance was availed and diverting the funds for other purposes.
- Disposed off the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank.
Which of the above statements is/are correct?
Correct
Solution: d)
Simply, default means non-payment of a loan availed by a borrower. A willful defaulter is an entity or a person that has not paid the loan back despite the ability to repay it.
A ‘wilful default’ would be deemed to have occurred if any of the following events is noted:
(a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to repay.
(b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes.
(c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilised for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets.
(d) The unit has defaulted in meeting its payment / repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank / lender.
Incorrect
Solution: d)
Simply, default means non-payment of a loan availed by a borrower. A willful defaulter is an entity or a person that has not paid the loan back despite the ability to repay it.
A ‘wilful default’ would be deemed to have occurred if any of the following events is noted:
(a) The unit has defaulted in meeting its payment / repayment obligations to the lender even when it has the capacity to repay.
(b) The unit has defaulted in meeting its payment / repayment obligations to the lender and has not utilised the finance from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes.
(c) The unit has defaulted in meeting its payment / repayment obligations to the lender and has siphoned off the funds so that the funds have not been utilised for the specific purpose for which finance was availed of, nor are the funds available with the unit in the form of other assets.
(d) The unit has defaulted in meeting its payment / repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank / lender.
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Question 3 of 5
3. Question
1 pointsConsider the following statements regarding Devaluation of currency.
- Devaluation decreases the prices of imports purchased in the home country.
- Devaluation can be employed to eliminate balance-of-payments deficits.
- Devaluation will not be effective if the balance-of-payments disequilibrium is a result of basic structural flaws in a country’s economy.
Which of the above statements is/are correct?
Correct
Solution: c)
Devaluation, reduction in the exchange value of a country’s monetary unit in terms of gold, silver, or foreign monetary units. Devaluation is employed to eliminate persistent balance-of-payments deficits. For example, a devaluation of currency will decrease prices of the home country’s exports that are purchased in the import country’s currency. While making the exported goods cheaper for other countries, devaluation also increases the prices of imports purchased in the home country. Devaluation will not be effective if the balance-of-payments disequilibrium is a result of basic structural flaws in a country’s economy.
Incorrect
Solution: c)
Devaluation, reduction in the exchange value of a country’s monetary unit in terms of gold, silver, or foreign monetary units. Devaluation is employed to eliminate persistent balance-of-payments deficits. For example, a devaluation of currency will decrease prices of the home country’s exports that are purchased in the import country’s currency. While making the exported goods cheaper for other countries, devaluation also increases the prices of imports purchased in the home country. Devaluation will not be effective if the balance-of-payments disequilibrium is a result of basic structural flaws in a country’s economy.
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Question 4 of 5
4. Question
1 pointsWhich of the following is the essential objective of ‘Viability gap funding’?
Correct
Solution: c)
Viability literally means ability to survive successfully. VGF is an economic instrument (or scheme) of Government of India, launched in 2004 with the motive of supporting projects which come under public-private partnerships (PPP) model. Basically, it is a grant to support projects that are economically justified but are not financially viable.
Incorrect
Solution: c)
Viability literally means ability to survive successfully. VGF is an economic instrument (or scheme) of Government of India, launched in 2004 with the motive of supporting projects which come under public-private partnerships (PPP) model. Basically, it is a grant to support projects that are economically justified but are not financially viable.
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Question 5 of 5
5. Question
1 pointsConsider the following statements about GDP deflator.
- GDP deflator reflects the prices of all domestically produced goods and services in the economy.
- The GDP deflator also includes the prices of investment goods, government services and exports.
- Monthly change in inflation cannot be tracked using GDP deflator.
Which of the above statements is/are correct?
Correct
Solution: d)
The Gross Domestic Product (GDP) deflator is a measure of general price inflation. It is calculated by dividing nominal GDP by real GDP and then multiplying by 100.
There are other measures of inflation too like Consumer Price Index (CPI) and Wholesale Price Index (or WPI); however, GDP deflator is a much broader and comprehensive measure. Since Gross Domestic Product is an aggregate measure of production, being the sum of all final uses of goods and services (less imports), GDP deflator reflects the prices of all domestically produced goods and services in the economy whereas, other measures like CPI and WPI are based on a limited basket of goods and services, thereby not representing the entire economy.
The GDP deflator also includes the prices of investment goods, government services and exports, and excludes the price of imports.
Incorrect
Solution: d)
The Gross Domestic Product (GDP) deflator is a measure of general price inflation. It is calculated by dividing nominal GDP by real GDP and then multiplying by 100.
There are other measures of inflation too like Consumer Price Index (CPI) and Wholesale Price Index (or WPI); however, GDP deflator is a much broader and comprehensive measure. Since Gross Domestic Product is an aggregate measure of production, being the sum of all final uses of goods and services (less imports), GDP deflator reflects the prices of all domestically produced goods and services in the economy whereas, other measures like CPI and WPI are based on a limited basket of goods and services, thereby not representing the entire economy.
The GDP deflator also includes the prices of investment goods, government services and exports, and excludes the price of imports.
