INSIGHT UPSC QUIZ

Which of the following statements regarding the differences between Consumer Price Index (CPI) and GDP Deflator are correct?

1. While CPI does not represent all the goods which are produced in a country, GDP deflator takes into account all such goods and services.

2. While CPI does not include prices of imported goods, GDP deflator includes prices of imported goods.

3. While the weights are constant in CPI, they differ according to production level of each good in GDP deflator.

Select the correct answer using the code given below.

Which of the following economic terms reflects the total borrowing requirement of the Government?  

1. Fiscal Deficit

2. Revenue Deficit 

3. Effective Revenue Deficit 

4. Primary Deficit  

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Consider the following statements:

1. RBI carries out the Open Market Operations (OMOs) through commercial banks and also directly with the public. 

2. If central bank signals that it will move to a ‘neutral’ liquidity stance from a ‘deficit’ stance, it means more liquidity is likely develop in the system in future. 

Which of the statements given above is/are correct?

 With reference to Indian Economy, which among the following is/are classified as foreign investment:

1. Investment made by Multinational Corporations (MNCs).

2. FDI under government route.

3. External Commercial Borrowings. 

4. Foreign investor investing in an Indian small scale industrial unit.

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In context of economic theory, a perfectly competitive market will have which of the following defining features?

 1. The market consists of a large number of buyers and sellers. 

 2. Each firm can produce and sell all types of products. 

 3. Entry into the market as well as exit from the market are free for firms.

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Which of the following would result in appreciation of the domestic currency (rupee) in terms of foreign currency (US dollar)?

1. Rise in the interest rates in India.

2. Increase in income of Indians in comparison to Americans.

2. Aggregate demand of India grows faster than the rest of the world’s demand.

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With reference to a normal Union Budget, consider the following types of deficits:

1. Fiscal Deficit.

2. Revenue Deficit.

3. Effective Revenue Deficit.

4. Primary Deficit.

Arrange the types of deficits mentioned above in decreasing order and select the correct answer using codes given below:

Consider the following statements with reference to ‘Balance of Trade (BOT)’: 

1. Difference between value of exports and value of imports of goods of a country in a given period of time.

2. Difference between the value of exports and value of imports of services of a country in a given period of time.

3. Difference between the value of exports and value of imports of services and assets of a country in a given period of time.

4. Difference between the value of capital account and the value of current account of a country in a given period of time.

Which of the statements given above correctly defines the term ‘Balance of Trade (BOT)’?

Which among the following are the merits of ‘flexible exchange rate system’ over ‘fixed exchange rate system’?

1. The government does not need to maintain large stock of foreign exchange reserves.

2. Movements in the exchange rate are managed by the central banks by buying and selling foreign currencies.

3. The countries gain autonomy in conducting their monetary policies.

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In context of a centrally planned economy, consider the following statements: 

1. The government always intervenes to achieve an equitable distribution of the final mix of goods and services amongst the population.

2. All important decisions regarding production, exchange and consumption of goods and services are made by the government. 

Which of the statement(s) given above is/are correct?