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Daily Quiz: January 8, 2019
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- Question 1 of 7
1. Question
1 pointsCategory: HistoryDeposit Insurance and Credit Guarantee Corporation (DICGC) is a very old subsidiary of RBI which provides insurance to all the banks registered under the guidelines of the RBI Act. The DICGC insures all deposits except which of the following types of deposits?
- Deposits of foreign Governments
- Deposits of Central/State Governments
- Inter-bank deposits
- Current Account Deposits of PSUs
Select the correct answer using the code given below
Correct
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a very old subsidiary of RBI which provides insurance to all the banks registered under the guidelines of the RBI Act. The aim of the DICGC Act, 1961 is to provide for the establishment of a corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and various other matters which are incidental to any event occurring DICGC Act. No insured banks can withdraw themselves from the DICGC coverage. The deposit insurance scheme is mandatory for all the banks. All commercial banks including branches of foreign banks functioning in India, nationalized/local banks and RRBs are insured by the DICGC. In the event of a bank failure, DICGC protects bank deposits that are payable in India. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except the following types of deposits.
(i) Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii)Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State co-operative bank;
(v) Any amount due on account of any deposit received outside India
(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
Incorrect
Deposit Insurance and Credit Guarantee Corporation (DICGC) is a very old subsidiary of RBI which provides insurance to all the banks registered under the guidelines of the RBI Act. The aim of the DICGC Act, 1961 is to provide for the establishment of a corporation for the purpose of insurance of deposits and guaranteeing of credit facilities and various other matters which are incidental to any event occurring DICGC Act. No insured banks can withdraw themselves from the DICGC coverage. The deposit insurance scheme is mandatory for all the banks. All commercial banks including branches of foreign banks functioning in India, nationalized/local banks and RRBs are insured by the DICGC. In the event of a bank failure, DICGC protects bank deposits that are payable in India. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. except the following types of deposits.
(i) Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii)Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State co-operative bank;
(v) Any amount due on account of any deposit received outside India
(vi) Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India.
- Question 2 of 7
2. Question
1 pointsCategory: HistoryWith reference to credit control methods used by RBI, which among the following is/are the quantitative tools to control Credit creation?
- Consumer Credit Regulation
- Open Market Operations
- Margin requirements
- Statutory Liquidity Ratio.
Choose the correct answer from the following codes below:
Correct
Credit control is most important function of Reserve Bank of India. Credit control in the economy is required for the smooth functioning of the economy. By using credit control methods RBI tries to maintain monetary stability.
There are two types of methods:
Quantitative control to regulates the volume of total credit. Qualitative Control to regulates the flow of credit. Quantitative measures Bank Rate Policy
- The bank rate is the Official interest rate at which RBI rediscounts the approved bills held by commercial banks. For controlling the credit, inflation and money supply, RBI will increase the Bank Rate. Open Market Operations
- Open Market Operations refer to direct sales and purchase of securities and bills in the open market by Reserve bank of India. The aim is to control volume of credit. Thus statement 2 is correct Cash Reserve Ratio
- Cash reserve ratio refers to that portion of total deposits in commercial Bank which it has
- to keep with RBI as cash reserves. Statutory Liquidity Ratio
- SLR refers to that portion of deposits with the banks which it has to keep with itself as liquid assets(Gold, approved govt. securities etc.) If RBI wishes to control credit and discourage credit it would increase CRR & SLR. Thus
statement 4 is correct Qualitative Measures Qualitative measures are used by the RBI for selective purposes. Some of them are Margin requirements
- This refers to difference between the securities offered and amount borrowed by the banks. Thus statement 3 is incorrect Consumer Credit Regulation
- This refers to issuing rules regarding down payments and maximum maturities of installment credit for purchase of goods. Thus
statement 1 is incorrect RBI Guidelines
- RBI issues oral, written statements, appeals, guidelines, warnings etc. to the banks. Rationing of credit
- The RBI controls the Credit granted / allocated by commercial banks. Moral Suasion
- Psychological means and informal means of selective credit control. Direct Action
- This step is taken by the RBI against banks that dont fulfil conditions and requirements.
- RBI may refuse to rediscount their papers or may give excess credits or charge a penal rate of interest over and above the Bank rate, for credit demanded beyond a limit.
Incorrect
Credit control is most important function of Reserve Bank of India. Credit control in the economy is required for the smooth functioning of the economy. By using credit control methods RBI tries to maintain monetary stability.
There are two types of methods:
Quantitative control to regulates the volume of total credit. Qualitative Control to regulates the flow of credit. Quantitative measures Bank Rate Policy
- The bank rate is the Official interest rate at which RBI rediscounts the approved bills held by commercial banks. For controlling the credit, inflation and money supply, RBI will increase the Bank Rate. Open Market Operations
- Open Market Operations refer to direct sales and purchase of securities and bills in the open market by Reserve bank of India. The aim is to control volume of credit. Thus statement 2 is correct Cash Reserve Ratio
- Cash reserve ratio refers to that portion of total deposits in commercial Bank which it has
- to keep with RBI as cash reserves. Statutory Liquidity Ratio
- SLR refers to that portion of deposits with the banks which it has to keep with itself as liquid assets(Gold, approved govt. securities etc.) If RBI wishes to control credit and discourage credit it would increase CRR & SLR. Thus
statement 4 is correct Qualitative Measures Qualitative measures are used by the RBI for selective purposes. Some of them are Margin requirements
- This refers to difference between the securities offered and amount borrowed by the banks. Thus statement 3 is incorrect Consumer Credit Regulation
- This refers to issuing rules regarding down payments and maximum maturities of installment credit for purchase of goods. Thus
statement 1 is incorrect RBI Guidelines
- RBI issues oral, written statements, appeals, guidelines, warnings etc. to the banks. Rationing of credit
- The RBI controls the Credit granted / allocated by commercial banks. Moral Suasion
- Psychological means and informal means of selective credit control. Direct Action
- This step is taken by the RBI against banks that dont fulfil conditions and requirements.
- RBI may refuse to rediscount their papers or may give excess credits or charge a penal rate of interest over and above the Bank rate, for credit demanded beyond a limit.
- Question 3 of 7
3. Question
1 pointsCategory: HistoryWith reference to National Income calculation, Consider the following statements
- GNP is always less than GDP.
- Depreciation is deducted from gross value to get the net value.
- Nominal GDP is GDP calculated at a Constant Market prices.
Which of the above statement(s) is/are correct?
Correct
Statement 1 is incorrect. GNP can be greater than, equal to or lesser than the GDP depending on the magnitude of Net Income from abroad
Statement 2 is correct. Depreciation is deducted from gross value to get the net value.
Statement 3 is incorrect. Real GDP is calculated at some constant set of prices (or constant prices). Nominal GDP, on the other hand, is simply the value of GDP at the current prevailing prices.
Incorrect
Statement 1 is incorrect. GNP can be greater than, equal to or lesser than the GDP depending on the magnitude of Net Income from abroad
Statement 2 is correct. Depreciation is deducted from gross value to get the net value.
Statement 3 is incorrect. Real GDP is calculated at some constant set of prices (or constant prices). Nominal GDP, on the other hand, is simply the value of GDP at the current prevailing prices.
- Question 4 of 7
4. Question
1 pointsCategory: HistoryHigh powered money includes
- Currency in circulation
- Other Deposits with the RBI
- Cash Reserves of the banks held with themselves
- Cash Reserves of the Banks held with RBI
Choose the correct answer from the following codes below:
Correct
The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money. Currency with the Public, Other Deposits with the RBI, Cash Reserves of the banks held with themselves, Cash Reserves of the Banks held with RBI etc
Incorrect
The total liability of the monetary authority of the country, RBI, is called the monetary base or high powered money. Currency with the Public, Other Deposits with the RBI, Cash Reserves of the banks held with themselves, Cash Reserves of the Banks held with RBI etc
- Question 5 of 7
5. Question
1 pointsCategory: HistoryWhich of the following statement(s) is/are correct?
- The Special Economic Zones Act was passed in the year 2005.
- The Union Minister of Commerce and Industry is the Chairman of Board of Approval of SEZs.
- The major incentive offered to the units in SEZs is 100% Income Tax exemption on export income for 25 years
Select the correct answer using the codes given below:
Correct
Statement 1 is correct:
The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005.
Statement 2 is Incorrect:
The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.
Statement 3 is Incorrect:
One of the major incentives provided for SEZ units is 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
Incorrect
Statement 1 is correct:
The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005.
Statement 2 is Incorrect:
The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.
Statement 3 is Incorrect:
One of the major incentives provided for SEZ units is 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
- Question 6 of 7
6. Question
1 pointsCategory: HistoryWhich of the following countries are the members of MERCOSUR?
- Argentina
- Brazil
- Uruguay
- Paraguay
- Venezuela
Select the correct answer using the codes given below:
Correct
- Mercosur is a custom union in South America. Its member countries are Argentina, Brazil, Paraguay, Uruguay. Its associate countries are Chile, Bolivia, Colombia, Ecuador and Peru. Observer countries are New Zealand and Mexico. Its purpose is to promote free trade and the fluid movement of goods, people, and currency.
- Venezuela was suspended in 2016 from the Mercosur trade group over its failure to comply with its commitments when it joined the group in 2012
Incorrect
- Mercosur is a custom union in South America. Its member countries are Argentina, Brazil, Paraguay, Uruguay. Its associate countries are Chile, Bolivia, Colombia, Ecuador and Peru. Observer countries are New Zealand and Mexico. Its purpose is to promote free trade and the fluid movement of goods, people, and currency.
- Venezuela was suspended in 2016 from the Mercosur trade group over its failure to comply with its commitments when it joined the group in 2012
- Question 7 of 7
7. Question
1 pointsCategory: HistoryUnemployment which exists in any economy due to people being in the process of moving from one job to another is termed as?
Correct
- Frictional unemployment is the unemployment which exists in any economy due to people being in the process of moving from one job to another.
- Structural unemployment is a form of unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap).
- Cyclical unemployment is a factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the business cycle. When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized
Incorrect
- Frictional unemployment is the unemployment which exists in any economy due to people being in the process of moving from one job to another.
- Structural unemployment is a form of unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap).
- Cyclical unemployment is a factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the business cycle. When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized