QUIZ – 2020: INSIGHTS STATIC QUIZ, 2 October 2020 – Economy

Solution: c)

ATMs set up, owned and operated by non-banks are called White label ATMs (WLAs). Non-bank ATM operators are authorised under the Payment & Settlement Systems Act, 2007 by the Reserve Bank of India (RBI).

For a customer, using a WLA is just like using an ATM of any bank.

Until recently, these white label ATMs were not allowed to accept cash deposits, but the latest guidelines have now allowed these ATM operators to provide this service. They can also offer bill payment services through their ATMs.

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Solution: b)

Marginal Standing Facility (MSF) was announced by the Reserve Bank of India (RBI) in its Monetary Policy (2011-12) and refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.

MSF, being a penal rate, is always fixed above the repo rate.

Solution: a)

In simple terms, inflation is basically too much money chasing too few goods, or excess demand chasing limited supply. In both these cases, the prices of goods rises faster as individual consumers bid process higher in order to get the good.

Excess supply is likely to bring prices down, not high. 

If income rises faster, demand for goods and services will also rise. On the other hand, if the economy is unable to satisfy the increased demand, for e.g. due to poor infrastructure, lack of production etc, the higher income will spiral the prices upwards and lead to high inflation.

Solution: a)

An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value. Dumping is a process where a company exports a product at a price lower than the price it normally charges in its own home market.

Solution: d)

Increase in repo rate by RBI would largely lead to increase in lending rates of banks.