Daily Quiz: April 9, 2019
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- Question 1 of 7
1. Question
1 pointsCategory: EconomyConsider the following Statement with reference to Liquidity adjustment facility:
1) LAF is a facility extended by the Reserve Bank of India to the scheduled commercial banks including RRBs
2) LAF enables liquidity management on a day to day basis.
3)The introduction of Liquidity adjustment facility in India was on the basis of the recommendations of Narasimham committee.
Choose the correct from the given option:
Correct
LAF is a facility extended by the Reserve Bank of India to the scheduled commercial banks (excluding RRBs) and primary dealers to avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an overnight basis against the collateral of Government securities including State Government securities.
The introduction of Liquidity adjustment facility in India was on the basis of the recommendations of Narsimham committee on banking sector reforms.
Incorrect
LAF is a facility extended by the Reserve Bank of India to the scheduled commercial banks (excluding RRBs) and primary dealers to avail of liquidity in case of requirement or park excess funds with the RBI in case of excess liquidity on an overnight basis against the collateral of Government securities including State Government securities.
The introduction of Liquidity adjustment facility in India was on the basis of the recommendations of Narsimham committee on banking sector reforms.
- Question 2 of 7
2. Question
1 pointsCategory: EconomyConsider the following statements about Cash Reserve Ratio:
- It is the ratio of deposits which banks have to keep with RBI .
- The increase in CRR will lead to increase in lending capacity of banks.
- Banks get a fixed interest on CRR from RBI
Which of the above statements are incorrect?
Correct
It is the ratio of Deposits which banks have to keep with RBI. Under CRR a certain percentage of the total bank deposits has to be kept in the current account with RBI. Banks don’t earn anything on that.
Banks will not have access to this amount. They cannot use this money for any of their economic or commercial activities. Banks can’t lend this portion of money to corporate or individual borrowers. With increase in CRR the lending capacity of banks will decrease as they will have less money.
Incorrect
It is the ratio of Deposits which banks have to keep with RBI. Under CRR a certain percentage of the total bank deposits has to be kept in the current account with RBI. Banks don’t earn anything on that.
Banks will not have access to this amount. They cannot use this money for any of their economic or commercial activities. Banks can’t lend this portion of money to corporate or individual borrowers. With increase in CRR the lending capacity of banks will decrease as they will have less money.
- Question 3 of 7
3. Question
1 pointsCategory: EconomyThe Money Supply in the economy affects which of the following macroeconomic variables:
Correct
The amount of money supply in the economy impacts prices i.e. when money supply increases inflation increases and when money supply decreases inflation decreases.
Money supply impacts GDP also, as more money is required to increase the output. When the demand for money increases, rate of interest goes up in the economy. So, when money supply increases then rate of interest may cool/decrease in the economy and vice versa.
Incorrect
The amount of money supply in the economy impacts prices i.e. when money supply increases inflation increases and when money supply decreases inflation decreases.
Money supply impacts GDP also, as more money is required to increase the output. When the demand for money increases, rate of interest goes up in the economy. So, when money supply increases then rate of interest may cool/decrease in the economy and vice versa.
- Question 4 of 7
4. Question
1 pointsCategory: EconomyWhich of the following will be included in a country’s national income?
- Expenditure on purchase of an old house.
- Brokerage on sale of shares.
- Meals given to the beggars.
- Commission on the sale on second hand car.
Select the correct answer using the codes given below.
Correct
In national income, all new goods and services produced are included. So, expenditure on purchase of an old house is not included. Brokerage on sale of shares is income of the agent for his services and it is included. Meals given to the beggars in not included because it is expenditure without any productive return. Commission on the sale on second hand car is again the income of the agent for his services and it will be included.
Incorrect
In national income, all new goods and services produced are included. So, expenditure on purchase of an old house is not included. Brokerage on sale of shares is income of the agent for his services and it is included. Meals given to the beggars in not included because it is expenditure without any productive return. Commission on the sale on second hand car is again the income of the agent for his services and it will be included.
- Question 5 of 7
5. Question
1 pointsCategory: EconomyConsider the following statements about the purchasing power parity
1.If the real exchange rate is equal to zero, currencies are at purchasing power parity.
2.If the real exchange rises above one, this means that goods abroad have become more expensive than goods at home.
3.The real exchange rate is taken as a measure of a country’s international competitiveness.
Which of the statements given above is/are correct?
Correct
If the real exchange rate is equal to one, currencies are at purchasing power parity.This means that goods cost the same in two countries when measured in the same currency. If the real exchange rises above one, this means that goods abroad have become more expensive than goods at home. The real exchange rate is often taken as a measure of a country’s international competitiveness
Incorrect
If the real exchange rate is equal to one, currencies are at purchasing power parity.This means that goods cost the same in two countries when measured in the same currency. If the real exchange rises above one, this means that goods abroad have become more expensive than goods at home. The real exchange rate is often taken as a measure of a country’s international competitiveness
- Question 6 of 7
6. Question
1 pointsCategory: EconomyConsider the following instruments of money transaction
- currency notes and coins
- savings account deposits
- current account deposits
- Fixed deposits
Which of the above given instruments is/are considered as demand deposits
Correct
Apart from currency notes and coins, the balance in savings, or current account deposits, heldby the public in commercial banks is also considered money since cheques drawn on theseaccounts are used to settle transactions. Such deposits are called demand deposits as they arepayable by the bank on demand from the account holder.
Incorrect
Apart from currency notes and coins, the balance in savings, or current account deposits, heldby the public in commercial banks is also considered money since cheques drawn on theseaccounts are used to settle transactions. Such deposits are called demand deposits as they arepayable by the bank on demand from the account holder.
- Question 7 of 7
7. Question
1 pointsCategory: EconomyConsider the following statements about Pradhan MantriFasalBimaYojana
- It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
- Post Harvest losses is not covered covered.
Which of the above statement(s) is/are correct?
Correct
It is to provide comprehensive insurance coverage against crop loss. It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
Losses covered – Non-Preventable risk such as Natural Fire, Storm, Hailstorm, Cyclone and Inundation has also been included as a localized calamity. Post Harvest losses also covered.
Incorrect
It is to provide comprehensive insurance coverage against crop loss. It is compulsory for farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
Losses covered – Non-Preventable risk such as Natural Fire, Storm, Hailstorm, Cyclone and Inundation has also been included as a localized calamity. Post Harvest losses also covered.
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