INSIGHT UPSC QUIZ

The term “liquidity trap” in an economy refers to:

1. People preferring to hold their wealth in money balance.

2. Additional money injected is unable to increase the demand for bonds.

3. Increase in money supply is unable to lower the rate of interest.

Which of the statements given above are correct?

With reference to the sources of credit in Indian economy, consider the following statements: 

1. Reserve Bank of India supervises the functioning of formal sources of loans. 

2. The Cooperatives supervise the credit activities of lenders in the informal sector.

Which of the statement(s) given above is/are NOT correct?

In order to balance any deficit in its balance of payments, a country can use which of the following financial measures?

1. Surplus in the capital account.

2. Official reserve sale.

3. Autonomous Transactions.

4. Accommodating Transactions.

Select the correct answer using the code given below.

Deviations from the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 are allowed under which of the following cases?

1. Implementation of the Core of the Core Schemes of the Union Government.

2. Collapse of agriculture severely affecting farm output and incomes.

3. Structural reforms in the economy with unanticipated fiscal implications.

4. Decline in real output growth of a quarter by at least three per cent points below its average of the previous four quarters.

Select the correct answer using the code given below.

 Consider the following instruments of ‘Monetary Policy’: 

1. Cash Reserve Ratio. 

2. Statutory Liquidity Ratio. 

3. Marginal Requirement.

4. Open Market Operations.

Which of the instruments given above are the ‘quantitative instruments’ of Monetary Policy? 

Consider the following statements: 

1. It acts as a medium of exchange. 

2. It acts as a convenient unit of account.

3. It act as a store of value for individuals. 

4. It helps to preserve the purchasing power against the rising price level.

Which of the statements mentioned above are the functions of ‘Money’? Select the correct answer using the codes given below:

Read the following statements carefully with reference to ‘Factor Cost, Basic Price and Market Price’: 

1. Factor cost includes only the payment to factors of production. It does not include any tax. 

2. Market price is the factor cost including total indirect taxes but excluding total subsidies. 

3. Basic price includes production taxes (less production subsidies) but not product taxes (less product subsidies). 

In reference to the concepts of ‘Factor Cost, Basic Price and Market Price’, which of the statements given above are correct? 

 Open Market Operations are defined as purchase and sale by central bank of variety of assets such as:

1. Foreign exchange.

2. Gold.

3. Government securities.

4. Treasury bills.

5. Company shares.

Select the correct answer using the code given below.

Which among the following are the examples of ‘indirect taxes’? 

1. Wealth tax 

2. Excise taxes 

3. Corporation tax

4. Customs duties 

5. Service tax 

Select the correct answer using the code given below.

 Which of the following types of deposits are regarded as part of money supply?

1. Currency (notes plus coins) held by the public.

2. Net demand deposits held by commercial banks. 

3. Net time deposits of commercial banks.

4. Savings deposits with Post Office savings banks.

5. Interbank deposits which a commercial bank holds in other commercial banks.

Select the correct answer using the code given below.