QUIZ – 2020: INSIGHTS STATIC QUIZ, 25 May 2020 – Economy

Solution: d)

Internationalisation of Rupee means the following:

1. When Indians import, they should be able to pay in rupees
2. When they export, they should accept payments in rupees
3. when they issue bonds globally, they should be able to repay in rupee regardless of the fact that they borrowed in foreign currency
4. All over the world individuals, companies and central banks should accumulate Indian rupee as a reserve currency because of its global demand.

Solution: b)

Option A: An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.

Option B: FDI is related to the capital sector and overall investment policy of the nation. FDI is not considered a trade component.

Option C: Such standards can effectively clog imports from competitor nations, for e.g. China in case of India.

Option D: A barrier to trade is a government-imposed restraint on the flow of international goods or services. The most common barrier to trade is a tariff—a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (goods produced at home).

Solution: c)

High CAD results in currency depreciation directly. Currency depreciation can directly feed into inflation.  Thus, a high CAD fuels directly into the domestic economy. Along with fiscal deficit, it leads to high inflation in the economy.

An overall consequence is that FII and other investors will not find the domestic market worthy enough to invest and pull off from it.

Solution: d)

Solution: d)

Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.