Hello Everyone,
These are the results and explanation of Tuesday Economy Quiz #12.
[Solutions]
Q.1)Consider the following statements about Brown label ATM:
1.Cash management and connectivity is provided by third party just like the hardware of the ATM
2.They do not have any Bank’s logo
3.Third party have to separately get license from RBI to run business
Which of the following are correct? Select the correct ans from the codes given below
a)1 and 2
b)2 and 3
c)1,2 and 3
d)None of the above
Ans-[D]
Explanation-‘Brown label’ ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM. RBI is not involved in giving license to them, rather they make the contracts directly with the bank and they bear the logo of the respective bank.
Q.2)Which of the following is not cause(s) of the recent rise of India’s trade deficit with China?
1.Fall in export of Iron ore from India
2.Eurozone slowdown
3.Protectionist measures adopted by China
a)3 only
b)2 and 3
c)1 only
d)1,2 and 3
Ans-[B]
Explanation-Fall in export of Iron ore to China is one of the cause. This article says. “Due to high incidence of export duty on iron ore, exports have declined from 117.37 MT (million tonne) in 2009-10 to a meagre 6.12 MT in 2014-15. India is fast losing out its competitiveness in global markets. The share of India in iron ore export to China has come down from 20% in 2008 to less than 0.5% in 2014.”
There are no such any protectionist policy in China and eurozone slowdown has led to the increase in the trade between India and China. Hence statement 1 is only correct and 2 and 3 are incorrect.
Q.3)Which of the following is true about National Investment and Manufacturing Zone?
a)It does not have any exit policy
b)State govt selects the lands and applies to central government
c)It will be of at least 10000 hectares in size
d)All above are correct
Ans-[B]
Explanation-NIMZ will put in a place a comprehensive exit policy that will promote productivity while providing flexibility by reducing rigidities.
Statement B is true. Minimum area is of 5000 hectares.
Q.4)Consider the following statements
1.Cash Management Bills are issued for above 100 days
2.They are issued at discount but redeemed at face value
Which of the following statement(s) is/are true? Select the answer from the codes given below
a)1 only
b)2 only
c)Both 1 and 2
d)Neither 1 nor 2
Ans-[B]
Explanation- The Government of India with the Reserve Bank of India issues a new short-term instrument, known as Cash Management Bills, to meet the temporary cash flow mismatches of the Government. The Cash Management Bills will be non-standard, discounted instruments issued for maturities less than 91 days.
Statement 1 is wrong. They are issued for less than 91 days. Statement 2 is correct.
Q.5)Consider the following statement(s)
1.Non uniform distribution
2.Positive and negative externalities
Which of the following is/are reason(s) of GDP not being an index of greater well being of the people
a)1 only
b)2 only
c)Both 1 and 2
d)Neither 1 nor 2
Ans-[C]
Explanation-Rise in GDP does not necessarily gives the equal distribution of income because rise in GDP may be due to sharp economic inequality. Hence it is non uniform distribution. Externalities refers to the benefits/harms a firm causes to which they are not paid. Hence statement 2 is also right.
Q.6)Which of the following can not lead to increase in employment?
a)Relaxing labor laws
b)Increasing financial repression
c)Providing incentives to MSME
d)Relaxing FDI
Ans[B]
Explanation-All other are means to increase employment in the country. Financial repression locks the capital and prevent expansion of investment opportunities.
Q.7)Consider the following statements about Qualified foreign investors
1.They are sub category of FDI
2.They can only invest in mutual funds
Which of the following statement(s) is/are correct?Select the correct ans from the codes given below
a)1 only
b)2 only
c)Both 1 and 2
d)None
Ans-[D]
Explanation- The Qualified Foreign Investor (QFI) is sub-category of Foreign Portfolio Investor and refers to any foreign individuals, groups or associations, or resident, however, restricted to those from a country that is a member of Financial Action Task Force (FATF) or a country that is a member of a group which is a member of FATF and a country that is a signatory to International Organization of Securities Commission’s (IOSCO) Multilateral Memorandum of Understanding (MMOU).
QFI scheme was introduced by Government of India in consultation with RBI and SEBI in the year 2011, through a Union Budget announcement.
The objective of enabling QFIs is to deepen and infuse more foreign funds in the Indian capital market and to reduce market volatility as individuals are considered to be long term investors, as compared to institutional investors.
QFIs are allowed to make investments in the following instruments by opening a demat account in any of the SEBI approved Qualified Depository Participant (QDP):
- Equity and Debt schemes of Indian mutual funds,
- Equity shares listed on recognized stock exchanges,
- Equity shares offered through public offers
- Corporate bonds listed/to be listed on recognized stock exchanges
- G-Securities, T-Bills and Commercial Papers
QFIs do not include FIIs/Sub-accounts/ Foreign Venture Capital Investor (FVCI).
Leave a Reply