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Daily Quiz: September 18, 2018
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- Question 1 of 7
1. Question
1 pointsCategory: EconomyWhich of the following factors may result into sudden fall of value in Stock market?
- Fear of economic depression
- Filing for bankruptcy by big corporations
- Bank reform policies of government
- Political and internal turmoil Select the correct answer using the code given below.
Correct
Statements 1, 2 and 4 are correct.
The factors that are leading to fall in the stock market are an economic depression, unstable government, If the country is engaged in war or a huge company is going to bankrupt, National calamities etc.
Statement 3 is incorrect.
Bank reform policies are usually give positive growth in stock market. Recently Bank of Baroda got 25% hike in their share because of government’s recent bank reform intervention.
Incorrect
Statements 1, 2 and 4 are correct.
The factors that are leading to fall in the stock market are an economic depression, unstable government, If the country is engaged in war or a huge company is going to bankrupt, National calamities etc.
Statement 3 is incorrect.
Bank reform policies are usually give positive growth in stock market. Recently Bank of Baroda got 25% hike in their share because of government’s recent bank reform intervention.
- Question 2 of 7
2. Question
1 pointsCategory: EconomyWhich of the following statements is/are correct regarding Stock exchanges operating in India?
- The National Stock Exchange of India NSE is Asia’s first stock exchange established in 1875.
- Bombay Stock Exchange (BSE) started trading in 1994 as the first demutualized electronic exchange in the country.
- Both BSE and NSE – follow the same trading mechanism, trading hours, settlement process.
Select the correct answer using the code given below.
Correct
Statement 1 is incorrect.
The BSE, Asia’s first stock exchange, was established in 1875. BSE is one of the world’s fastest stock exchanges, with a median trade speed of 6 microseconds.
Statement 2 is incorrect.
The NSE, on the other hand, was founded in 1992 and started trading in 1994, as the first demutualized electronic exchange in the country. It was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country.
Statement 3 is correct.
Both exchanges – BSE and NSE – follow the same trading mechanism, trading hours, settlement process, etc.
Incorrect
Statement 1 is incorrect.
The BSE, Asia’s first stock exchange, was established in 1875. BSE is one of the world’s fastest stock exchanges, with a median trade speed of 6 microseconds.
Statement 2 is incorrect.
The NSE, on the other hand, was founded in 1992 and started trading in 1994, as the first demutualized electronic exchange in the country. It was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system which offered easy trading facility to the investors spread across the length and breadth of the country.
Statement 3 is correct.
Both exchanges – BSE and NSE – follow the same trading mechanism, trading hours, settlement process, etc.
- Question 3 of 7
3. Question
1 pointsCategory: EconomyConsider the following statements:
- When one person uses a public good, it does not prevent others from using it.
- Unlike public goods, private goods are rivalrous in nature.
Which of the statements given above is/are correct?
Correct
Statement 1 is correct.
Public goods are available everywhere. Public goods include fresh air, knowledge, official statistics, national security, common language(s), flood control systems, lighthouses, street lighting etc. The use of these goods by one individual does not reduce availability to others. A public good has two key characteristics i.e it is nonexcludable and nonrivalrous. These characteristics make it difficult for market producers to sell the good to individual consumers. Nonexcludable means that it is costly or impossible for one user to exclude others from using a good.
Statement 2 is correct.
The rivalrous characteristic arises from the fact that one’s consumption of the good precludes any other person from consuming it. If you eat an apple, that Apple is not available for consumption by others. Excludability means that one can be prevented from consuming the good. Nonrivalrous means that when one person uses a good, it does not prevent others from using it. It is the main characteristic of public goods.
Incorrect
Statement 1 is correct.
Public goods are available everywhere. Public goods include fresh air, knowledge, official statistics, national security, common language(s), flood control systems, lighthouses, street lighting etc. The use of these goods by one individual does not reduce availability to others. A public good has two key characteristics i.e it is nonexcludable and nonrivalrous. These characteristics make it difficult for market producers to sell the good to individual consumers. Nonexcludable means that it is costly or impossible for one user to exclude others from using a good.
Statement 2 is correct.
The rivalrous characteristic arises from the fact that one’s consumption of the good precludes any other person from consuming it. If you eat an apple, that Apple is not available for consumption by others. Excludability means that one can be prevented from consuming the good. Nonrivalrous means that when one person uses a good, it does not prevent others from using it. It is the main characteristic of public goods.
- Question 4 of 7
4. Question
1 pointsCategory: EconomyWith reference to Asian Infrastructure Investment Bank (AIIB), consider the following:
- It is a multilateral development bank set up to develop infrastructure exclusively in Asia.
- India will host the third Annual Meeting of the Board of Governors of AIIB at Mumbai on June 2018.
Which of the statements given above is/are correct?
Correct
Statement 1 is incorrect.
Its operations are not limited to Asia. Asian Infrastructure Investment Bank (AIIB), a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond. It is headquartered in Beijing.
Statement 2 is correct.
India will host the 3rd Annual Meeting of the Board of Governors of AIIB at Mumbai on 25th and 26th
June 2018. The Theme of the Annual Meeting, 2018 will be “Mobilizing Finance for Infrastructure: Innovation and Collaboration”.
Incorrect
Statement 1 is incorrect.
Its operations are not limited to Asia. Asian Infrastructure Investment Bank (AIIB), a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond. It is headquartered in Beijing.
Statement 2 is correct.
India will host the 3rd Annual Meeting of the Board of Governors of AIIB at Mumbai on 25th and 26th
June 2018. The Theme of the Annual Meeting, 2018 will be “Mobilizing Finance for Infrastructure: Innovation and Collaboration”.
- Question 5 of 7
5. Question
1 pointsCategory: EconomyWith reference to the routes through which Foreign Direct Investment can be invested in India, consider the following statements:
- Foreign investment through Automatic Route implies investment without prior approval of the Government of India or the Reserve Bank of India.
- Foreign Investment Promotion Board (FIPB) is the sole approval body in case of foreign investment in activities not covered under the automatic route.
Which of the statements given above is /are correct?
Correct
Statement 1 is correct.
Foreign Investment is allowed under the automatic route without prior approval of the Government or the Reserve Bank of India, in all activities/ sectors as specified in Annex B of Schedule 1 to Notification No. FEMA 20. Government Route of foreign investment or foreign investment in activities not covered under the automatic route requires prior approval of the Government which is considered by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, Ministry of Finance. Foreign Investment Promotion Board (FIPB) is not the sole approval body in case of such investments. Hence,
statement 2 is incorrect.
Incorrect
Statement 1 is correct.
Foreign Investment is allowed under the automatic route without prior approval of the Government or the Reserve Bank of India, in all activities/ sectors as specified in Annex B of Schedule 1 to Notification No. FEMA 20. Government Route of foreign investment or foreign investment in activities not covered under the automatic route requires prior approval of the Government which is considered by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, Ministry of Finance. Foreign Investment Promotion Board (FIPB) is not the sole approval body in case of such investments. Hence,
statement 2 is incorrect.
- Question 6 of 7
6. Question
1 pointsCategory: EconomyWhich of the following statement correctly describes the term Balance of Payment (BoP)?
Correct
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP:
Current Account, Capital Account, Official Reserve Transactions The current account includes all the transactions related to export and import of goods and services, investment income, and unilateral transfers (remittances, gifts, grants etc.).
The capital account includes all international asset transactions (FDI, FPI etc.).
The official reserve transactions are conducted by central banks like RBI whenever there is BoP deficit or BoP surplus. These transactions are conducted in the form of international reserve assets, such as gold and major international currencies. The sum of the three BoP components should be zero. There is another element in BoP that is ‘Errors and Omissions’, which is the balancing item reflecting our inability to record all international transactions accurately.
Incorrect
The Balance of International payments or Balance of Payments refers to the systematic and summary record of a country’s economic and financial transactions with the rest of the world, over a period of time.
The three main components of BoP:
Current Account, Capital Account, Official Reserve Transactions The current account includes all the transactions related to export and import of goods and services, investment income, and unilateral transfers (remittances, gifts, grants etc.).
The capital account includes all international asset transactions (FDI, FPI etc.).
The official reserve transactions are conducted by central banks like RBI whenever there is BoP deficit or BoP surplus. These transactions are conducted in the form of international reserve assets, such as gold and major international currencies. The sum of the three BoP components should be zero. There is another element in BoP that is ‘Errors and Omissions’, which is the balancing item reflecting our inability to record all international transactions accurately.
- Question 7 of 7
7. Question
1 pointsCategory: EconomyWhich of the following statements is/are not correct about the new economic policy of 1991?
- It allowed private players in all sectors of the economy without restriction.
- It wanted to convert Indian economy to a market economy.
- It wanted to permit the international flow of goods, services and capital without any restrictions.
Select the correct answer using the codes given below.
Correct
Statement 1 is incorrect.
The new economic policy wanted to increase the participation of private players in the all sectors of the economy. However, the number of sectors reserved for public sector enterprises was reduced, the reservation was not eliminated.
Statement 2 is correct.
The new economic policy wanted to achieve economic stabilization and to convert the economy in to a market economy by removing all kinds of unnecessary restrictions.
Statement 3 is correct.
The new economic policy wanted to permit the international flow of goods, services, capital, human resources and technology, without any restrictions.
Incorrect
Statement 1 is incorrect.
The new economic policy wanted to increase the participation of private players in the all sectors of the economy. However, the number of sectors reserved for public sector enterprises was reduced, the reservation was not eliminated.
Statement 2 is correct.
The new economic policy wanted to achieve economic stabilization and to convert the economy in to a market economy by removing all kinds of unnecessary restrictions.
Statement 3 is correct.
The new economic policy wanted to permit the international flow of goods, services, capital, human resources and technology, without any restrictions.
