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Question 1 of 5
1. Question
2 points
Which of the following statements are correct?
The Gross fiscal deficit does not include borrowings.
To conclude the primary deficit, paid interest is deducted from the Gross Fiscal Deficit.
The ultimate goal of the FRBM Committee is to limit India’s fiscal deficit to 3% of its Gross Domestic Production.
Select the correct answer using the code given below:
Correct
Answer: D Explanation:
Statement 1 is correct: Fiscal Deficit = Total expenditure of the government (capital and revenue expenditure) – Total income of the government (Revenue receipts + recovery of loans + other receipts)
Statement 2 is correct: A primary deficit is a difference between the current year’s fiscal deficit and the interest paid on the borrowings of the previous year.
Statement 3 is correct: The ultimate goal of the FRBM Committee is to limit India’s fiscal deficit to 3% of its Gross Domestic production.
Incorrect
Answer: D Explanation:
Statement 1 is correct: Fiscal Deficit = Total expenditure of the government (capital and revenue expenditure) – Total income of the government (Revenue receipts + recovery of loans + other receipts)
Statement 2 is correct: A primary deficit is a difference between the current year’s fiscal deficit and the interest paid on the borrowings of the previous year.
Statement 3 is correct: The ultimate goal of the FRBM Committee is to limit India’s fiscal deficit to 3% of its Gross Domestic production.
Question 2 of 5
2. Question
2 points
Consider the following:
Rise in population.
Black money.
The rise in income.
Excessive government expenditure.
Which of the above are the demand-pull factors for inflation in an Economy?
Correct
Answer: D
Explanation:
There can be two sets of factors that can cause inflation in an economy. They are Demand-Pull and Cost-Push.
Demand-Pull Factors
Rise in population.
Black money.
The rise in income.
Excessive government expenditure.
Cost-Push Factors
Infrastructure bottlenecks which lead rise in production and distribution costs.
Rise in Minimum Support Price (MSP).
Rise in international prices.
Hoarding and black marketing.
The rise in indirect taxes.
Incorrect
Answer: D
Explanation:
There can be two sets of factors that can cause inflation in an economy. They are Demand-Pull and Cost-Push.
Demand-Pull Factors
Rise in population.
Black money.
The rise in income.
Excessive government expenditure.
Cost-Push Factors
Infrastructure bottlenecks which lead rise in production and distribution costs.
Rise in Minimum Support Price (MSP).
Rise in international prices.
Hoarding and black marketing.
The rise in indirect taxes.
Question 3 of 5
3. Question
2 points
Which of the following statements is/are correct about Gross National Product?
Like Gross Domestic Production (GDP), it is not territory specific.
If we consider the GNP of India, it can be seen that GNP is lesser than GDP.
Select the correct answer using the code given below:
Correct
Answer: C
Explanation:
Statement 1 is correct: Gross National Product (GNP) is the total value of goods and services produced by the people of a country in a given year. It is not territory specific.
Statement 2 is correct: If we consider the GNP of India, it can be seen that GNP is lesser than GDP.
Incorrect
Answer: C
Explanation:
Statement 1 is correct: Gross National Product (GNP) is the total value of goods and services produced by the people of a country in a given year. It is not territory specific.
Statement 2 is correct: If we consider the GNP of India, it can be seen that GNP is lesser than GDP.
Question 4 of 5
4. Question
1 points
With reference to the exchange rate of currency, consider the following statements:
The exchange rate of a currency is an indicator of the economic strength of a country.
A devaluation of the currency means that more local currency is needed to purchase imports. Hence, imports become more expensive.
If the government fixes the exchange rate of a currency, such a system is called the Bretton Woods system.
Which of the statements given above is/are incorrect?
Correct
Answer: A
Explanation:
Statement 1 is incorrect: The exchange rate of a currency is not an indicator of the economic strength of a country. The economic position of India in 2017 is far better than that of 1947, though there is a fall in the Rupee value.
Statement 2 is correct: A devaluation means that more local currency is needed to purchase imports and exporters get more local currency.
Statement 3 is correct: If the government or RBI fix the exchange rate of a currency (and does not allow any variations according to demand and supply forces in the market), such a system is called the Fixed Rate system. It is also called the Bretton Woods system or Pegged Currency System.
Incorrect
Answer: A
Explanation:
Statement 1 is incorrect: The exchange rate of a currency is not an indicator of the economic strength of a country. The economic position of India in 2017 is far better than that of 1947, though there is a fall in the Rupee value.
Statement 2 is correct: A devaluation means that more local currency is needed to purchase imports and exporters get more local currency.
Statement 3 is correct: If the government or RBI fix the exchange rate of a currency (and does not allow any variations according to demand and supply forces in the market), such a system is called the Fixed Rate system. It is also called the Bretton Woods system or Pegged Currency System.
Question 5 of 5
5. Question
2 points
With reference to the Differentiated Banks, which of the following statements is/are correct?
Differentiated Banks (niche banks) serve the needs of a certain demographic segment of the population.
Small Finance Banks and Payment Banks are examples of Differentiated Banks in India.
Select the correct answer using the code given below:
Correct
Answer: C
Explanation:
Statement 1 is correct: There are two kinds of banking licences that the Reserve Bank of India grants – Universal Bank Licence and Differentiated Bank Licence. Differentiated Banks (niche banks) serve the needs of a certain demographic segment of the population.
Statement 2 is correct: Small Finance Banks and Payment Banks are examples of differentiated banks in India. Custodian Banks and Wholesale and Long-Term Finance banks (WLTF) are newly proposed differentiated banks.
Incorrect
Answer: C
Explanation:
Statement 1 is correct: There are two kinds of banking licences that the Reserve Bank of India grants – Universal Bank Licence and Differentiated Bank Licence. Differentiated Banks (niche banks) serve the needs of a certain demographic segment of the population.
Statement 2 is correct: Small Finance Banks and Payment Banks are examples of differentiated banks in India. Custodian Banks and Wholesale and Long-Term Finance banks (WLTF) are newly proposed differentiated banks.
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