QUIZ – 2019: INSIGHTS STATIC QUIZ, 21 DECEMBER 2019 – Economy

Solution: b)

Inflation can be controlled by increasing the supplies of goods and services and reducing money incomes in order to control aggregate demand.

Fiscal measures to control inflation:

• The government should reduce unnecessary expenditure on non-development activities in order to curb inflation.
• To cut personal consumption expenditure, the rates of personal, corporate and commodity taxes should be raised

Some protectionist measures (such as banning the export of essential items such as pulses, cereals and oils to support the domestic consumption, encourage imports by lowering duties on import items etc.).

Solution: b)

• Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks.

Solution: c)

The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

Petroleum Refinery production (weight: 28.04 per cent).

Growth in the eight core sectors in August slumped to the lowest in four years and four months. That is, the -0.5% registered in August 2019 was the lowest since April 2015.

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Solution: c)

The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of international trade between nations. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. It is the largest international economic organization in the world.

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.

The WTO can …

1 … cut living costs and raise living standards
2 … settle disputes and reduce trade tensions
3 … stimulate economic growth and employment
4 … cut the cost of doing business internationally
5 … encourage good governance
6 … help countries develop
7 … give the weak a stronger voice
8 … support the environment and health
9 … contribute to peace and stability
10 … be effective without hitting the headlines

Members

Members, dually represented by the EU

Observers

Non-participant states

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Solution: c)

D-SIB means that the bank is too big to fail. According to the RBI, some banks become systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. Banks whose assets exceed 2% of GDP are considered part of this group. The RBI stated that should such a bank fail, there would be significant disruption to the essential services they provide to the banking system and the overall economy.

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