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Daily Quiz: December 4, 2018
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- Question 1 of 7
1. Question
1 pointsCategory: EconomyTrade and Development Report is published by:
Correct
The Trade and Development Report (TDR), launched in 1981, is issued every year for the annual session of the Trade and Development Board.
The Report analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels.
Incorrect
The Trade and Development Report (TDR), launched in 1981, is issued every year for the annual session of the Trade and Development Board.
The Report analyses current economic trends and major policy issues of international concern, and makes suggestions for addressing these issues at various levels.
- Question 2 of 7
2. Question
1 pointsCategory: EconomyIncreasing of the Bank Rate will lead to:
Correct
First, bank rate is the rate at which central bank (in case of India, it is RBI) of a country provides re-financing facilities or provides loans to the commercial banks.
When bank rate is lowered, it is called ‘cheap money policy’. Money supply in the economy is increased. Commercial banks now can borrow from the RBI at cheaper rates and can pass on this change to their customers through by providing loans at cheaper rate. Now, say if you want to get a home loan, your cost of getting that loan gets decreased. Generally, RBI lowers the bank rate during a period of recession/slowdown or sluggish economic activity. Reduced costs of loans, encourage companies/manufacturing units etc to borrow more for increasing production and consumers to spend more. Thus, economic activity in the country picks up.
Incorrect
First, bank rate is the rate at which central bank (in case of India, it is RBI) of a country provides re-financing facilities or provides loans to the commercial banks.
When bank rate is lowered, it is called ‘cheap money policy’. Money supply in the economy is increased. Commercial banks now can borrow from the RBI at cheaper rates and can pass on this change to their customers through by providing loans at cheaper rate. Now, say if you want to get a home loan, your cost of getting that loan gets decreased. Generally, RBI lowers the bank rate during a period of recession/slowdown or sluggish economic activity. Reduced costs of loans, encourage companies/manufacturing units etc to borrow more for increasing production and consumers to spend more. Thus, economic activity in the country picks up.
- Question 3 of 7
3. Question
1 pointsCategory: EconomyConsider the following statement about ADB:
- Asian Development Bank has its Headquarter based in Manila.
- All the members are Asia-Pacific region
- It Finances to Sovereign Government and Private Parties.
Correct
ADB is multilateral lending agency based in Manila, Philippines. It is dedicated to reduce poverty in Asia and the Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration.
Statement 2 is wrong:
ADB has 67 members – 48 from the Asia-Pacific region including India and is collectively owned by these 67 members. The non Asia pacific region members are only developed countries.
Most of the ADB’s lending (~80%) is concentrated public sector lending in five operational areas viz. Education; Environment, Climate Change & Disaster Management; Finance Sector Development; Regional Cooperation & Integration and Private sector lending.
It provides finance to both sovereign countries as well as private parties. It provides hard loans to middle income countries while soft loans to poorer countries.
When RBI increases bank rate, it is called ‘dear money policy’. Money becomes costlier. RBI, does so, generally, during a period of inflation. Commercial banks are compelled to pay higher interest to the RBI which in turn prompts them to raise the interest rates on loans they offer to customers. The customers then are dissuaded in taking credit from banks, leading to a shortage of money in the economy and less liquidity. So, while on the one hand, inflation is under controlled as there is less money to spend, growth suffers as companies avoid taking loans at high rates, leading to a shortfall in production and expansion.
Incorrect
ADB is multilateral lending agency based in Manila, Philippines. It is dedicated to reduce poverty in Asia and the Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration.
Statement 2 is wrong:
ADB has 67 members – 48 from the Asia-Pacific region including India and is collectively owned by these 67 members. The non Asia pacific region members are only developed countries.
Most of the ADB’s lending (~80%) is concentrated public sector lending in five operational areas viz. Education; Environment, Climate Change & Disaster Management; Finance Sector Development; Regional Cooperation & Integration and Private sector lending.
It provides finance to both sovereign countries as well as private parties. It provides hard loans to middle income countries while soft loans to poorer countries.
When RBI increases bank rate, it is called ‘dear money policy’. Money becomes costlier. RBI, does so, generally, during a period of inflation. Commercial banks are compelled to pay higher interest to the RBI which in turn prompts them to raise the interest rates on loans they offer to customers. The customers then are dissuaded in taking credit from banks, leading to a shortage of money in the economy and less liquidity. So, while on the one hand, inflation is under controlled as there is less money to spend, growth suffers as companies avoid taking loans at high rates, leading to a shortfall in production and expansion.
- Question 4 of 7
4. Question
1 pointsCategory: EconomyConsider the following statements about angel investor:
- They invest in small start ups or budding entrepreneurs.
- They invest in the fast growing companies with the motive of high returns.
Correct
Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages. Angel investors provide more favorable terms compared to other lenders, since they usually invest in the entrepreneur starting the business rather than the viability of the business. Angel investors are focused on helping startups take their first steps, rather than the possible profit they may get from the business. Essentially, angel investors are the opposite of venture capitalists.
Angel investors are also called informal investors, angel funders, private investors, seed investors or business angels. These are affluent individuals who inject capital for startups in exchange for ownership equity or convertible debt. Some angel investors invest through crowdfunding platforms online or build angel investor networks to pool in capital.
Incorrect
Angel investors invest in small startups or entrepreneurs. Often, angel investors are among an entrepreneur’s family and friends. The capital angel investors provide may be a one-time investment to help the business propel or an ongoing injection of money to support and carry the company through its difficult early stages. Angel investors provide more favorable terms compared to other lenders, since they usually invest in the entrepreneur starting the business rather than the viability of the business. Angel investors are focused on helping startups take their first steps, rather than the possible profit they may get from the business. Essentially, angel investors are the opposite of venture capitalists.
Angel investors are also called informal investors, angel funders, private investors, seed investors or business angels. These are affluent individuals who inject capital for startups in exchange for ownership equity or convertible debt. Some angel investors invest through crowdfunding platforms online or build angel investor networks to pool in capital.
- Question 5 of 7
5. Question
1 pointsCategory: EconomyWhich of the following Index is calculated and published by Central Statistics Office (CSO)?
- Consumer Price Index (CPI)
- Wholesale Price Index (WPI)
- Index of Industrial Production (IIP)
Select the correct answer using the codes given below:
Correct
CPI is a measure of change in retail prices of goods and services consumed by defined population group in a given area with reference to a base year. The formula for calculating Consumer Price Index is Laspeyre’s with base year 2010.It is calculated by Central Statistics Office (CSO) < In the Ministry of Statistics and Programme Implementation (MOSPI)
The WPI measures the price of a representative basket of wholesale goods. WPI captures price movements in a most comprehensive way. It is calculated by – Office of the Economic Adviser <In DIPP (Department of Industrial Policy and Promotion) < In Ministry of Commerce & Industry.
Index of Industrial Production (IIP) measures the quantum of changes in the industrial production in an economy and captures the general level of industrial activity in the country. It is a composite indicator expressed in terms of an index number which measures the short term changes in the volume of production of a basket of industrial products during a given period with respect to the base period(2004).It is calculated by Central Statistics Office (CSO) < In the Ministry of Statistics and Programme Implementation (MOSPI)
Incorrect
CPI is a measure of change in retail prices of goods and services consumed by defined population group in a given area with reference to a base year. The formula for calculating Consumer Price Index is Laspeyre’s with base year 2010.It is calculated by Central Statistics Office (CSO) < In the Ministry of Statistics and Programme Implementation (MOSPI)
The WPI measures the price of a representative basket of wholesale goods. WPI captures price movements in a most comprehensive way. It is calculated by – Office of the Economic Adviser <In DIPP (Department of Industrial Policy and Promotion) < In Ministry of Commerce & Industry.
Index of Industrial Production (IIP) measures the quantum of changes in the industrial production in an economy and captures the general level of industrial activity in the country. It is a composite indicator expressed in terms of an index number which measures the short term changes in the volume of production of a basket of industrial products during a given period with respect to the base period(2004).It is calculated by Central Statistics Office (CSO) < In the Ministry of Statistics and Programme Implementation (MOSPI)
- Question 6 of 7
6. Question
1 pointsCategory: EconomyWhich of the following is/are regulated by the Reserve Bank of India?
- Infrastructure Debt Fund (IDF)
- Merchant Banking Companies
- Venture Capital Fund
- Factor Company
- Asset Finance Co.s (AFC)
Select the correct answer using the codes given below:
Correct
Infrastructure Debt Fund (IDF), Asset Finance Co.s (AFC), Infrastructure Finance Company, Investment Co.s, Factor Company(Factoring business ex. HSBC) etc are regulated by Reserve Bank of India (RBI)
Merchant Banking Companies, Venture Capital Fund, Stock Brokers, Mutual Funds are regulated by Securities and Exchange Board of India (SEBI).
Incorrect
Infrastructure Debt Fund (IDF), Asset Finance Co.s (AFC), Infrastructure Finance Company, Investment Co.s, Factor Company(Factoring business ex. HSBC) etc are regulated by Reserve Bank of India (RBI)
Merchant Banking Companies, Venture Capital Fund, Stock Brokers, Mutual Funds are regulated by Securities and Exchange Board of India (SEBI).
- Question 7 of 7
7. Question
1 pointsCategory: EconomyThe M2 concept of money supply includes which of the following?
- Time Deposits with the banks.
- Savings deposits with the post office savings banks.
- Demand deposits with the public in the commercial and cooperative banks.
- Other deposits held by the public with Reserve Bank of India.
Select the correct answer using the codes given below:
Correct
Concepts of Money Supply:
Ml = C + DD + OD
Where, C = Currency with the public
DD = Demand deposits with the public in the commercial and cooperative banks.
OD = Other deposits held by the public with Reserve Bank of India
M2 = M1 + Savings deposits with the post office savings banks.
M3= M1+ Time Deposits with the banks.
M4 = M3 + Total Deposits with Post Office Savings Organisation.
Incorrect
Concepts of Money Supply:
Ml = C + DD + OD
Where, C = Currency with the public
DD = Demand deposits with the public in the commercial and cooperative banks.
OD = Other deposits held by the public with Reserve Bank of India
M2 = M1 + Savings deposits with the post office savings banks.
M3= M1+ Time Deposits with the banks.
M4 = M3 + Total Deposits with Post Office Savings Organisation.