[Mission 2023] QUIZ : Insights Current Affairs Quiz , 15 August 2022

Solution: a)

The rate of inflation in a country can have a major impact on the value of the country’s currency and the rates of foreign exchange it has with the currencies of other nations. However, inflation is just one factor among many that combine to influence a country’s exchange rate.

Inflation is more likely to have a significant negative effect, rather than a significant positive effect, on a currency’s value and foreign exchange rate.

Inflation and Interest Rates:

Inflation is closely related to interest rates, which can influence exchange rates. Countries attempt to balance interest rates and inflation, but the interrelationship between the two is complex and often difficult to manage. Low interest rates spur consumer spending and economic growth, and generally positive influences on currency value. If consumer spending increases to the point where demand exceeds supply, inflation may ensue, which is not necessarily a bad outcome. But low interest rates do not commonly attract foreign investment. Higher interest rates tend to attract foreign investment, which is likely to increase the demand for a country’s currency.

Solution: c)

What is Securities Transaction Tax?

STT is a kind of financial transaction tax which is similar to tax collected at source (TCS). STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT Act has specifically listed down various taxable securities transaction i.e., transaction on which STT is leviable.

Taxable securities include equity, derivatives, unit of equity oriented mutual fund. It also includes unlisted shares sold under an offer for sale to the public included in IPO and where such shares are subsequently listed in stock exchanges. STT is an amount to be paid over and above transaction value and hence, increases transaction value.

The term ‘securities’ is defined in Securities Contracts (Regulation) Act, 1956.

Solution: d)

Gas hydrates are ice-like crystalline minerals that form when low molecular weight gas (such as methane, ethane, or carbon dioxide) combines with water and freezes into a solid under low temperature and moderate pressure conditions.

• Most gas hydrates are formed from methane (CH4), which has led to the terms “gas hydrate” and “methane hydrate” often being used interchangeably.
• On Earth, gas hydrates occur naturally in some marine sediments and within and beneath permafrost. They are also speculated to form on other planets.

• Gas hydrate deposits may contain roughly twice the carbon contained in all reserves of coal, oil, and conventional natural gas combined, making them a potentially valuable energy resource.
• Their decomposition can release large amounts of methane, which is a greenhouse gas that could impact Earth’s climate.
• Sudden release of pressurized methane gas may cause submarine landslides, which in turn can trigger tsunamis.

Solution: c)

Predatory Pricing – the pricing of goods or services at such a low level that other firms cannot compete and are forced to leave the market.

Solution: d)