Q.1 The terms SMA0, SMA1 and SMA2 are related to ?
a) Inflation targeting
b) Narrow, Broad and Reserved money
c) Non-Performing Assets of banks
d) Small scale industries
Ans: c) These terms are related to deal with and avoid the Non-Performing assets of the banks.
SMA-0, where principal or interest payment was not overdue for more than 30 days but the account showed signs of incipient stress; SMA-1, where principal or interest payment was overdue for 31-60 days; and SMA-2, where principal or interest payment was overdue for 61-180 days.
As soon as the account becomes SMA -2, a Joint lenders forum must be formed compulsorily for loans above Rs. 1000 million so as to take appropriate action.
Q.2 The twin balance sheet problem as mentioned in Economic Survey relates to:
a) Banks and Corporate sector
b) Fiscal Deficit and Current Account Deficit
c) Stressed sectors
d) None of these
Ans: a) Due to bad balance sheet (NPAs) banks are unable to give new credit at the same time due to bad balance sheet and low profits, corporates are not willing to invest (take loans), this is twin balance sheet problem.
Q.3 Which of the following is not a component of Rashtriya Krishi Vikas Yojana?
a) Bringing Green Revolution to Eastern India
b) National Mission for Protein Supplements
c) Saffron Mission
d) Integrated Scheme of Oilseeds, Pulses, Oil Palm and Maize
Ans: d) A,B and C are a part of RKVY.
Q.4 Which among the following fall under the ‘One Product One Price’ category?
c) Both (a) and (b)
d) None of these
This term ‘One Product One Price’ is also from economic survey. This means that a product should have one price and not different prices for different users. Difference in prices leads to subversion of products to unintended users.
LPG is sold at higher prices to corporates than to households. This leads to diversions, whereby household cylinders are diverted to corporate at a lesser cost than what corporates would have actually paid.
Urea too is having different prices for agriculture sector as well as for industries which leads to diversion of urea from agriculture to industries.
Q.5 Consider the following statements regarding the Financial Action Task Force (FATF):
1. It gives recommendation on preventing money laundering as well as terrorism financing.
2. India is a full time member of FATF
3. It has no authority to place sanctions on countries violating laws related to money laundering and terrorism financing
Which of the statements given above is/are incorrect:
a) 1 and 2 only
b) 2 and 3 only
c) 1, 2 and 3 only
d) None of the above
Ans: d) All the statements are true.
Q.6 Consider the following statements regarding International Monetary Fund (IMF)
1. USA has a veto power in IMF
2. According to the current reform both the quota as well as voting power of India has increased
3. SDR currently is a basket of 4 currencies
Identify the correct statement?
a) 1 only
b) 1 and 2 only
c) 2 only
d) 1, 2 and 3
Ans: d) USA holds 16.5 % in IMF and major decision taken by IMF require 85% of total votes, so USA has veto.
India’s quota as well as voting share has increased in IMF.
IMF has accepted to include Yuan but it will be included only from October so right now SDR is a basket of just 4 currencies : US Dollar, Pound Sterling, Yen and Euro.
Q.7 Special 301 report which was recently in the news is related to:
a) Drug Pricing Policy
b) Ranking of higher education institutions
c) List of countries with weak Intellectual Property Rights
d) Measures taken by G-33 countries in WTO
Ans: c) Self explanatory.