INSIGHTS STATIC QUIZ 2020 - 21
Quiz-summary
0 of 5 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
Information
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 5 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- Answered
- Review
-
Question 1 of 5
1. Question
Consider the following statements.
- Real GDP is the GDP derived after adding the effect of inflation.
- The difference between the real and nominal GDP shows the levels of inflation in the year.
Which of the above statements is/are correct?
Correct
Solution: b)
Real GDP, which is the GDP after taking away the effect of inflation, is a derived metric. All Budget calculations start with the nominal GDP.
Real GDP = Nominal GDP — Inflation Rate
However, from the perspective of the common people, real GDP is what matters. The difference between the real and nominal GDP shows the levels of inflation in the year.
Incorrect
Solution: b)
Real GDP, which is the GDP after taking away the effect of inflation, is a derived metric. All Budget calculations start with the nominal GDP.
Real GDP = Nominal GDP — Inflation Rate
However, from the perspective of the common people, real GDP is what matters. The difference between the real and nominal GDP shows the levels of inflation in the year.
-
Question 2 of 5
2. Question
India’s external debt stock can increase because of an increase in
- Foreign Direct Investment
- External Commercial Borrowings
- Non-resident Indian Deposits
Select the correct answer code:
Correct
Solution: b)
External debt can be mainly classified into Long term and Short-term debts.
Long-Term debt is further classified into (a) Multilateral Debt (b) Bilateral Debt (c) ‘IMF’ signifying SDR allocations to India by the IMF (c) Export Credit (d) (External) Commercial Borrowings (e) NRI Deposits and (d) Rupee Debt.
Short Term Debt is classified into (a) Trade Credits (of up to 6 months and above 6 months and up to 1 year) (b) Foreign Institutional Investors’ (FII) Investment in Government Treasury-Bills and Corporate Securities (c) Investment in Treasury-bills by foreign Central Banks and International Institutions etc.
FDI does not lead to any debt on the country.
Incorrect
Solution: b)
External debt can be mainly classified into Long term and Short-term debts.
Long-Term debt is further classified into (a) Multilateral Debt (b) Bilateral Debt (c) ‘IMF’ signifying SDR allocations to India by the IMF (c) Export Credit (d) (External) Commercial Borrowings (e) NRI Deposits and (d) Rupee Debt.
Short Term Debt is classified into (a) Trade Credits (of up to 6 months and above 6 months and up to 1 year) (b) Foreign Institutional Investors’ (FII) Investment in Government Treasury-Bills and Corporate Securities (c) Investment in Treasury-bills by foreign Central Banks and International Institutions etc.
FDI does not lead to any debt on the country.
-
Question 3 of 5
3. Question
When the Reserve Bank of India increases the repo rate by 50 basis points, which of the following likely to happen?
Correct
Solution: d)
Increase in repo rate by RBI would largely lead to increase in lending rates of banks.
Incorrect
Solution: d)
Increase in repo rate by RBI would largely lead to increase in lending rates of banks.
-
Question 4 of 5
4. Question
A progressive and a regressive taxation system is differentiated on the basis of
Correct
Solution: b)
A progressive tax is defined as a tax whose rate increases as the payer’s income increases. That is, individuals who earn high incomes have a greater proportion of their incomes taken to pay the tax.
A regressive tax, on the other hand, is one whose rate increases as the payer’s income decreases.
Particular taxes can also be classified as regressive or progressive.
For e.g. consumption taxes are called as regressive, as rich spend less (and hence pay less taxes) on consumption goods as a proportion of their income.
Incorrect
Solution: b)
A progressive tax is defined as a tax whose rate increases as the payer’s income increases. That is, individuals who earn high incomes have a greater proportion of their incomes taken to pay the tax.
A regressive tax, on the other hand, is one whose rate increases as the payer’s income decreases.
Particular taxes can also be classified as regressive or progressive.
For e.g. consumption taxes are called as regressive, as rich spend less (and hence pay less taxes) on consumption goods as a proportion of their income.
-
Question 5 of 5
5. Question
Consider the following statements regarding Reserve Money.
- Reserve money consists of vault cash in banks and deposits of commercial banks with RBI.
- Banks use this reserve to meet the demand for cash by account holders.
Which of the above statements is/are incorrect?
Correct
Solution: d)
Banks hold a part of the money people keep in their bank deposits as reserve money and loan out the rest to various investment projects. Reserve money consists of two things – vault cash in banks and deposits of commercial banks with RBI. Banks use this reserve to meet the demand for cash by account holders.
Incorrect
Solution: d)
Banks hold a part of the money people keep in their bank deposits as reserve money and loan out the rest to various investment projects. Reserve money consists of two things – vault cash in banks and deposits of commercial banks with RBI. Banks use this reserve to meet the demand for cash by account holders.
Join our Official Telegram Channel HERE for Motivation and Fast Updates
Subscribe to our YouTube Channel HERE to watch Motivational and New analysis videos
