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[Solutions] – Tuesday Economy Quiz #18

tuesday-solution (1)


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?

a) Urea

b) LPG

c) Both (a) and (b)

d) None of these

Ans :d)

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.

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  • Gautam Himanshu

    bhai.. plz aisi advice apne pass hi rakha kare.. coz UPSC woh Oonth (camel) hai jo kis taraf baithe kisi ko nahi pata hota… spcly in questions like these where there is a lot of ambiguity..

  • Rudraa Kumar

    In PT focus only on Available Optiion,, pls save all d GYANBAJI for Mains.(???)

  • Psycho Knight

    thanks..keep up the good work

  • Alexander_MessiahOfGarib

    Yaa, It should be like that only…

  • Mohamed Ibrahim

    USA is having 16.5% Vote share in IMF and for taking major decision, 85% of vote is needed. So, if USA did not vote in favor, it will have only 83.5%, so the decision cannot be taken. I think we can consider it as Veto.

  • Gautam Himanshu

    in Q 6,there is nothing like veto power officially in IMF.. it’s only due to voting power so can we say that US have veto power in IMF??