INSIGHTS STATIC QUIZ 2019
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- Question 1 of 5
1. Question
Which of the following best describes ‘Bank Rate’?
CorrectSolution: b)
Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks.
IncorrectSolution: b)
Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks.
- Question 2 of 5
2. Question
Consider the following statements about Index of Eight Core Industries (ICI).
- ICI provide an advance indication on production performance of industries of ‘core’ nature before the release of Index of Industrial Production.
- The Index is compiled and released by Central Statistics Office.
- Refinery Products are not part of eight core industries.
Which of the above statements is/are correct?
CorrectSolution: a)
The objective of the ICI is to provide an advance indication on production performance of industries of ‘core’ nature before the release of Index of Industrial Production (IIP). ICI measures collective and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity.
The Index is compiled and released by Office of the Economic Adviser (OEA).
IncorrectSolution: a)
The objective of the ICI is to provide an advance indication on production performance of industries of ‘core’ nature before the release of Index of Industrial Production (IIP). ICI measures collective and individual performance of production in selected eight core industries viz. Coal, Crude Oil, Natural Gas, Petroleum Refinery Products, Fertilizers, Steel, Cement and Electricity.
The Index is compiled and released by Office of the Economic Adviser (OEA).
- Question 3 of 5
3. Question
Consider the following statements regarding India’s External Debt.
- The debtors can be Union government, state governments, corporations or citizens of India.
- Long-term borrowings dominate India’s external debt.
- The largest of India’s external debt is the United States dollar.
- Multilateral debt by the international financial institutions is the largest component of external debt.
Which of the above statements is/are correct?
CorrectSolution: c)
The external debt of India is the total debt the country owes to foreign creditors. The debtors can be the Union government, state governments, corporations or citizens of India. The debt includes money owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
Long-term borrowings (more than a year to maturity) dominate India’s external debt.
Commercial borrowings remained the largest component of external debt, with a share of 38.4 per cent, followed by non-resident deposits (24 per cent) and short-term trade credit (18.7 per cent).
IncorrectSolution: c)
The external debt of India is the total debt the country owes to foreign creditors. The debtors can be the Union government, state governments, corporations or citizens of India. The debt includes money owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
Long-term borrowings (more than a year to maturity) dominate India’s external debt.
Commercial borrowings remained the largest component of external debt, with a share of 38.4 per cent, followed by non-resident deposits (24 per cent) and short-term trade credit (18.7 per cent).
- Question 4 of 5
4. Question
Gross capital formation will necessarily increase if:
- Gross domestic savings increases
- Gross domestic consumption increases
- GDP increases
Select the correct answer code:
CorrectSolution: d)
Gross capital formation, in simple terms is equivalent to investment made. It was earlier called gross domestic investment. The part of GDP that is used is called gross domestic consumption, while the part that is saved is gross domestic savings (GDS). Some part of this GDS will be re-invested back, and that is called gross capital formation. Now, an increase in GDP or GDS will not necessarily lead to an increase in capital formation. Because how much is invested back will depend on many other factors.
IncorrectSolution: d)
Gross capital formation, in simple terms is equivalent to investment made. It was earlier called gross domestic investment. The part of GDP that is used is called gross domestic consumption, while the part that is saved is gross domestic savings (GDS). Some part of this GDS will be re-invested back, and that is called gross capital formation. Now, an increase in GDP or GDS will not necessarily lead to an increase in capital formation. Because how much is invested back will depend on many other factors.
- Question 5 of 5
5. Question
Which of the following factors are considered for determining Minimum Support Prices?
- Cost of production
- Inter-crop price parity
- Effect on cost of living
- International price situation
Select the correct answer code:
CorrectSolution: d)
In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission for Agricultural Costs and Prices takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-
- Cost of production
- Changes in input prices
- Input-output price parity
- Trends in market prices
- Demand and supply
- Inter-crop price parity
- Effect on industrial cost structure
- Effect on cost of living
- Effect on general price level
- International price situation
IncorrectSolution: d)
In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission for Agricultural Costs and Prices takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the following factors:-
- Cost of production
- Changes in input prices
- Input-output price parity
- Trends in market prices
- Demand and supply
- Inter-crop price parity
- Effect on industrial cost structure
- Effect on cost of living
- Effect on general price level
- International price situation