[Solutions] Tuesday Economy Quiz #11

Hello Everyone, These are the results and explanation of Tuesday Economy Quiz #11.

[Solutions]

Q1. Which of the following measures is not likely to help in improving India’s balance of payment position?

a) Devaluation of the rupee

b) Encouragement of import substitution

c) Imposition of higher duty on imports

d) Imposition of higher duty on exports

Ans d) Devaluation of rupee will eventually lead to higher exports which will lead to greater money inflow, hence, improving the BoP.

Import substitution and higher duty on imports means the country will be spending less on imports so money outflow will be checked and BoP will improve.

Higher duty on exports means that the exportable goods will become costlier for the country buying it, this will lead to decline in export and money inflow will be decreased. This will not help in improving the BoP.

 

Q2. “Sunrise Industries” are industries

a) which are well developed and have ample scope for further development

b) which improve export performance of the country

c) which are small scale industries

d) which have high growth potential and meet further requirements of the economy

Ans: d)

 

Q3. Consider the following: 

1. Life expectancy at birth

2. Gross enrolment ratio for schools

3. GNI per capita adjusted for Purchasing Power Parity

4. Expected years of schooling for a school age child

Which of the above is/are the parameters for the measurement of Human Development Index by UNDP?

a) 1, 3 and 4 only

b) 1, 2 and 3 only

c) 1, 2 and 4 only

d) 1, 2, 3 and 4

Ans a) Earlier Gross enrolment ratio was one of the parameters of HDI. It used to come under education index. It is no longer a parameter. The education index now includes:

1. Expected years of schooling for a school age child
2. Mean years of prior schooling for adults aged 25 years and older

 

Q4. Which of the following constitute the World Bank Group?

1. International Bank of Reconstruction and Development

2. International Finance Corporation

3. International Development Association

4. International Monetary Fund

Choose the correct answers from the code given below:

a) 1, 2 and 4 only

b) 2, 3 and 4 only

c) 1, 2 and 3 only

d) 1, 2, 3 and 4

Ans c) IMF is not a part of world bank. It is a different organisation all together. Rest all are a part of World Bank.

 

Q5. Which of the following sectors do not fall under the ambit of the stressed sector classification of RBI?

a) Iron and Steel

b) Coal

c) Textiles

d) Aviation

Ans b) As per RBI , 5 sectors fall under the category of stressed sectors. These are, Iron and Steel, Infrastructure, Textiles, Mining and Aviation.

 

Q6. Consider the following statements regarding Special Safeguard Mechanism (SSM)

1. There are provisions through which a WTO member can temporarily impose higher than bound tariffs on the import of any commodity if there is a sudden surge of that commodity in the country

2. It is a trade defense mechanism which can essentially counter the volatility of international commodity prices

3. Both, developed as well as developing countries can impose SSM

Which of the statements given above is/are true?

a) 1 and 2 only

b) 1 and 3 only

c) 2 only

d) 2 and 3 only

Ans c) Through SSM , WTO members can impose higher tariffs on agricultural commodities only and not on “any” commodity.

It can only be imposed by developing countries.

Statement 2 is correct.

 

Q7. Which one of the following statements appropriately describes the “fiscal stimulus”?

a) It is a massive investment by the Government in manufacturing sector to ensure the supply of goods to meet the demand surge caused by rapid economic growth

b) It is an intense affirmative action of the Government to boost economic activity in the country

c) It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation

d) It is an extreme affirmative action by the Government to pursue its policy of financial inclusion

Ans b) It is an intense affirmative action of the Government to boost economic activity in the country.