Revision Test for Prelims- lesson-2 Presented By-Prabhakar Jha
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-1) Which of the following statements is/are correct regarding Monetarv Transmission? 1. It refers to the process by which a central bank's monetary policy decisions are passed on to the financial markets 2. Rising Non-Performing Assets (NPAs) and higher returns on small savings schemes may hinder effective monetary transmission 3. Lowering of CRR and SLR requirements may help ensure effective monetary transmission -Select the correct answer using the code given below -(a) 1 only (b) 2 and 3 only (c) 1 and 2 only (d) 1,2 and 3
ANSWER-D he monetary transmission mechanism is the process by which asset prices and general economic conditions are affected as a result of monetary policy decisions. Such decisions are intended to influence the aggregate demand, interest rates, and amounts of money and credit in order to affect overall economic performance. The traditional monetary transmission mechanism occurs through interest rate channels, which affect interest rates, costs of borrowing, levels of physical investment, and aggregate demand. Additionally, aggregate demand can be affected through friction in the credit markets, known as the credit view. In short, the monetary transmission mechanism can be defined as the link between monetary policy and aggregate demand
-2)Which of the following services are accounted in the Gross Domestic Product of a country? -1. Services rendered bv a domestic help 2. Services rendered by a worker from unorganized sector -3. Services produced in Indian embassies located abroad -4. Services produced in military establishments located abroad -Select the correct answer using the codes given below -(a) 1 and 2 only -(b) 1, 2 and 3 only (c) 2,3 and 4 only -(d) 1, 2, 3 and 4
ANSWER-D What is not included in GDP Intermediate goods, second hand sales and two othersNon market transactions-trading or barter, Homemaker services Underground economy-gambling, smuggling, prostitution, drugs and counterfeiting
-3). With reference to Effective Revenue Deficit; consider the following statements: 1. It was introduced on the recommendation of 13th Finance Commission 2. It includes all the revenue expenditure done in the form of grants for creation of capital assets 3. Grants given under MNREGA to build capital assets like roads and ponds forms part of it Which of the statements given above is/are correct? -(a) 1 only (b) 2 and 3 only (c) 3 only (d) None
ANSWER-D Effective Revenue Deficit is the difference between revenue deficit and grants for the creation of capital assets. In other words, the Effective Revenue Deficit excludes those revenue expenditures which were done in the form of grants for the creation of capital assets
Consider the following statements; Assertion (A): In the agricultural lending mechanism of India, moneylenders despite their usurious rates of interest are still predominant. Reason (R): Most often the commercial banks could not meet the target of 18% of their total lending for the agricultural sector in the country. Select the appropriate answer using the codes below: (a) Both (A) and (R) are true and (R) is the correct explanation of (A). - (b) Both (A) and (R) are true, but (R) is not the correct explanation of (A) . (c) (A) is true and (R) is false. (d) (A) is false and (R) is true.
ANSWER-A DESPITE A 120% INCREASE IN RURAL HOUSEHOLDS WITH BANK ACCOUNTS IN THE DECADE TO 2011.. RURAL HOUSEHOLDS AVAILING PERCENTAGE OF RURAL HOUSEHOLDS AVAILING BANKING SERVICES BANKING SERVICES 91.4 million 30.1% 41.6 million 2001 54.4% 2001 2011 2011
ANSWER-B In economics, the monetary base (also base money, money base, high-powered money, reserve money, outside money, central bank money or, in the UK, narrow money) in a country is defined as the portion of a commercial bank's reserves that consist of the commercial bank's accounts with its central bank plus the total currency circulating in the public, plus the currency, also known as vault cash, that is physically held in the bank's vault. Thus reserve money is not a debt obligation for the government.
ANSWER-B The economic survey says that investment rate is much more significant for growth. The savings rate correlation to economic growth is not that significant. It says that growth slowdowns have been preceded by investment slowdowns. more significant for gwoth that
ANSWER-B Pink-Color Economic Survey 2017-18 Highlights Gender Issues Against Backdrop of Development Beti Bachao, Beti Padhao; Sukanya Samridhi Yojana and Mandatory Maternity Leave are all Steps in Right Direction, Acknowledges Survey.
-9). Which of the following doesn't belong to the 10 facts pointed by Economic Survey 2017: -a) Formal non-agricultural payroll much greater than believed b) States prosperity positively correlated with their international and inter-state trade c) Clothing incentive package boosts exports of readymade garments d) Direct tax collections by state/local governments is significantly higher compared with those of their counterparts in other federal countries
ANSWER-C -Banks faced shortage of capital to give adequate credit and also high cost of operations and stress assets led to higher costs for all sections of the society.
ANSWER-B -Flexi funding is a good thing and not a challenge but an opportunity for states. Rest will put additional fiscal burden on the performance of state governments.
-14). Which factors provided impetus to the impressive fiscal performance by the states? 1. Passing of Fiscal responsibility legislations 2. Acceleration of GDP growth 3. Decline in interest payments 4. increased transfers from the Centre and central CSS expenditure Identify the incorrect statements a) 1 &2 only b) 2 & 3 only c) All d) None
-16). Consider the following statements: - Assertion (A): After Fiscal Responsibility legislations were passed, states expanded more discretionary spending Reason (R) : It would be easier to scale back discretionary spending, if needed to achieve the deficit targets -Identify the correct statements (Assertion - A & Reason - R) a) Both A and R are true but R is the correct explanation of A -b) Both A and R are true but R is not a correct explanation of A -c) A is true but R is false -d) A is false but R is true
ANSWER-A - Indian companies expanded aggressively before the recession and got stuck with surplus capacity and slowing global economy. The financial crises also made access to working capital tougher.
-19). Graded surveillance system is in the news in the context of: -a) Abnormal rise in Non-performing assets of Public Sector Banks b) Detection of various shell companies and money laundering c) Unusual price movements in the stock Market d) Detection of various frauds in the banking system
ANSWER-C Lipu Lekh pass is high altitude mountain pass in Uttarakhand suitable for accessing Kailash-Manasarovar from Western Side
ANSWER-C TIR convention will boost Indian trade with Central Asian countries and neighboring countries. It is considered as India's counter to China's OBOR project. It also includes maritime transport but at least a part of transport should be through roadway:s transport should be meoranaport but at least a
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