QUIZ – 2020: INSIGHTS STATIC QUIZ, 4 November 2020 – Economy

Solution: b)

GDP is the value of the final goods and services produced within a country within an year.

Indian nationals living abroad do not contribute to India’s GDP. They do however contribute to India’s GNP.

But, the gross capital investments made during a financial year directly accounts as a part of GDP since it creates infrastructure which has an economic value.

Solution: c)

Hard currency refers to money that is issued by a nation that is seen as politically and economically stable. Hard currencies are widely accepted around the world as a form of payment for goods and services and may be preferred over the domestic currency.

A hard currency is expected to remain relatively stable through a short period of time, and to be highly liquid in the forex or foreign exchange (FX) market. The most tradable currencies in the world are the U.S. dollar (USD), European euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD) and the Australian dollar (AUD). All of these currencies have the confidence of international investors and businesses because they are not generally prone to dramatic depreciation or appreciation.

Solution: b)

Insured Banks

The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits

• Deposits of foreign Governments;
• Deposits of Central/State Governments;
• Inter-bank deposits;
• Deposits of the State Land Development Banks with the State co-operative bank;
• Any amount due on account of and deposit received outside India
• Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India

Solution: d)

The government recently launched a new series for Consumer Price Index — Industrial Workers (CPI-IW) changing the base year to 2016 from 2001.

The CPI-IW is primarily used to regulate the dearness allowance of government employees and the workers in the industrial sectors. It is also used in the determination and revision of minimum wages in scheduled employments.
The new series is more representative in character and reflects the latest consumption pattern of the industrial workers.

Labour Bureau, a unit of the labour ministry, has been compiling and releasing CPI-IW numbers since its inception in 1946. The base year for inflation gauges is typically changed from time to time to capture the complex churnings in the economy.

Source

Solution: b)

The yield curve is a graph showing the relationship between interest rates earned on lending money for different durations.

Normally, someone who lent to the government or a corporation for one year (by buying a one-year government or corporate bond) would expect to get a lower interest rate than someone who lent for five or ten years, making the yield curve upward-sloping.

Recently In US the ten-year bond rate had fallen to the point at which the ten-year rate was below the two-year rate – so the yield curve was inverted.

The yield curve turns negative when near-term Treasurys yield more than their long-term counterparts.