Doubt Clearance Thread: UPSC 2021
"When in doubt, observe and ask questions. When certain, observe at length and ask many more questions."
Created this thread as a one stop solution for all members so that all the doubts wherein any conceptual clarification is required can be solved here.
@Archand This was asked in CDS this year. Don't have the official key yet but I found 'b' given on several websites. Please tell how you ruled out 'c' ?
In my opinion , we take nominal interest rates because whenever we buy a loan , and when we payback, inflation is not acocunted. If inflation would have been accounted it would have lead to lots of issues, changing rate of interest which is not good for the banks or the customers.
Archand,sjerngal@Archand This was asked in CDS this year. Don't have the official key yet but I found 'b' given on several websites. Please tell how you ruled out 'c' ?
As is mentioned above, real interest rates are impractical to use in the real world. And I had also solved this using@D503's approach. Reverse engineering basically. In his equation, the amount paid back does not consider inflation and therefore it can't be real interest rate. Hope this helps :)
sstarrr,sjerngal
Private debt – to – GDP is more than Government debt – to – GDP.
is this correct?
I don't think so.
India's debt lower than best emerging market economies: IMF - The Economic Times (indiatimes.com)
This article says the public debt-GDP ratio is higher than pvt. debt-GDP ratio. The article is from 2018 but considering COVID-19 which has increased the borrowings by the government, I think this should still be the case. Also there are reports of India's public debt-GDP ratio reaching 90% in 2020-21.
Which of the following statements are true regarding 'Terms of trade' (ToT) of a country with another country:
(i) It is ratio of export price index to import price index
(ii) It is a ratio of value of exports to value of imports
(iii) It is a measure of how much imports a country can get for a unit of exported goods
(iv) ToT increases with increase in price of exported goods
Select the correct answer using the code given below:
(a) (i) only
(b) (ii) & (iv)
(c) (i), (iii) & (iv) only
(d) (ii), (iii) & (iv) only
shouldn't the answer be option d , ??
Which of the following statements are true regarding 'Terms of trade' (ToT) of a country with another country:
(i) It is ratio of export price index to import price index
(ii) It is a ratio of value of exports to value of imports
(iii) It is a measure of how much imports a country can get for a unit of exported goods
(iv) ToT increases with increase in price of exported goods
Select the correct answer using the code given below:
(a) (i) only
(b) (ii) & (iv)
(c) (i), (iii) & (iv) only
(d) (ii), (iii) & (iv) only
shouldn't the answer be option d , ??
I think its b. There is gross and net terms of trade. Gross terms of trade is the ratio of volume of exports to value of imports. Net is about the value of trade. For India both are -ve.
Which of the following statements are true regarding 'Terms of trade' (ToT) of a country with another country:
(i) It is ratio of export price index to import price index
(ii) It is a ratio of value of exports to value of imports
(iii) It is a measure of how much imports a country can get for a unit of exported goods
(iv) ToT increases with increase in price of exported goods
Select the correct answer using the code given below:
(a) (i) only
(b) (ii) & (iv)
(c) (i), (iii) & (iv) only
(d) (ii), (iii) & (iv) only
shouldn't the answer be option d , ??
I think its b. There is gross and net terms of trade. Gross terms of trade is the ratio of value of exports to value of imports. Net is about the volume of trade. For India both are -ve.
See TOT is what you have explained but its the export price / import price that is equivalent to statement third . Hence its C , i mixed it up with price and value .
Another doubt : Investment in unlisted company is always treated as FDI is this statement correct ??
I read somewhere that it may be treated as FDI irrespective of threshold
can someone clarify this please
Consider the following statements regarding the interest rates linked with an external benchmark rate:
(i) External benchmark rate can be repo rate or yield on government securities or any rate published by Financial Benchmarks India Pvt. Ltd.
(ii) Once repo rate changes the lending rate of banks will automatically change
(iii) Banks are mandated by RBI to link the deposit and lending rate with external benchmark rate
Select the correct answer using the code given below:
(a) (i) only
(b) (i) & (ii) only
(c) (ii) only
(d) (i) & (iii) only
why the third statement is wrong can someone tell this please and also the previous doubt
Consider the following statements regarding the interest rates linked with an external benchmark rate:
(i) External benchmark rate can be repo rate or yield on government securities or any rate published by Financial Benchmarks India Pvt. Ltd.
(ii) Once repo rate changes the lending rate of banks will automatically change
(iii) Banks are mandated by RBI to link the deposit and lending rate with external benchmark rate
Select the correct answer using the code given below:
(a) (i) only
(b) (i) & (ii) only
(c) (ii) only
(d) (i) & (iii) only
why the third statement is wrong can someone tell this please and also the previous doubt
I'm not a 100% sure, but I don't think they're mandated to link their deposit rates to external benchmarks. Only the lending rates.
Dionysus,THE_MECHANICConsider the following statements regarding the interest rates linked with an external benchmark rate:
(i) External benchmark rate can be repo rate or yield on government securities or any rate published by Financial Benchmarks India Pvt. Ltd.
(ii) Once repo rate changes the lending rate of banks will automatically change
(iii) Banks are mandated by RBI to link the deposit and lending rate with external benchmark rate
Select the correct answer using the code given below:
(a) (i) only
(b) (i) & (ii) only
(c) (ii) only
(d) (i) & (iii) only
why the third statement is wrong can someone tell this please and also the previous doubt
I'm not a 100% sure, but I don't think they're mandated to link their deposit rates to external benchmarks. Only the lending rates.
you are right, that must be the case
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