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Total Number of Questions : 10
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Total Correct : 5
Total Wrong : 5
Cyclical unemployment is most likely to increase during an economic recession when industries experience workforce reductions and organizational downsizing due to a decline in production.
#Veer Bal Diwas is observed on December 26 in India to honor the courage and martyrdom of Guru Gobind Singh’s two younger sons, Sahibzada Baba Zorawa
Credit-to-GDP ratio is a key metric that economists and policymakers use to assess the financial health of an economy. It is expressed as a percentage and is calculated by dividing the total outstanding credit in an economy by its gross domestic product (GDP).
**In simpler terms,** credit-to-GDP ratio tells you how much debt an economy has taken on relative to the size of its economy.
Here’s a breakdown of the two components:
* **Total outstanding credit:** This includes all loans and credit extended by banks, financial institutions, and other lenders to businesses, households, and the government.
* **Gross domestic product (GDP):** This is the total market value of all final goods and services produced within a country’s borders in a given year.
A higher credit-to-GDP ratio generally indicates a higher level of borrowing in an economy. This can be a good thing if the credit is used for productive purposes, such as investing in businesses or infrastructure. However, if the credit is used for unproductive purposes, such as speculation or excessive consumer spending, it can lead to financial instability and even crises.
Here are some of the reasons why credit-to-GDP ratio is important:
* **It can be an indicator of economic growth:** A rising credit-to-GDP ratio can indicate that businesses and households are borrowing more to invest and spend, which can lead to economic growth.
* **It can be a sign of financial vulnerability:** A rapidly rising credit-to-GDP ratio can be a sign that an economy is taking on too much debt, which can make it more vulnerable to financial crises.
* **It can be used to assess the effectiveness of monetary policy:** Central banks can use changes in interest rates to influence the credit-to-GDP ratio. A lower interest rate can make it cheaper to borrow, which can lead to a higher credit-to-GDP ratio. Conversely, a higher interest rate can make it more expensive to borrow, which can lead to a lower credit-to-GDP ratio.
The ideal credit-to-GDP ratio varies depending on the country and its stage of development. There is no one-size-fits-all answer, but generally, a credit-to-GDP ratio of around 100% is considered to be relatively healthy. However, ratios above 150% can be a sign of potential trouble.
Here are some examples of countries with different credit-to-GDP ratios:
* **China:** 269% (as of 2023)
* **United States:** 195% (as of 2023)
* **Japan:** 236% (as of 2023)
* **Germany:** 62% (as of 2023)
It is important to note that the credit-to-GDP ratio is just one indicator of economic health. It should be considered in conjunction with other factors, such as economic growth, inflation, and unemployment.
The Brandt Line divides the countries of Global North and the Global South. The Brandt Line was proposed by Willy Brandt in the 1980s. It is an imaginary line that divides the world into richer countries (mainly in the Northern Hemisphere) and poorer countries (mostly in the Southern Hemisphere).
Your Score Card
Total Number of Questions : 10
Total Not Attempted Questions : 0
Total Correct : 8
Total Wrong : 2
You have scored
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Score=12.68/20
Correct=7
Incorrect=2
Unattempted=1