1. Consider the following statements.
1. Participatory Notes are derivative
instruments
2. They are used by Foreign Institutional
Investors (FIIs) who are registered with
SEBI.
3. They are used on Indian shares, but at a
location outside India.
Which of the above statements are correct?
(a) Only 1 & 2 (b) Only 1 & 3
(c) Only 2 & 3 (d) All of the above

 

2. Consider the following definition of urban area
according to Indian census.
1. minimum population of 5000.
2. at least seventy five percent of all working
population engaged is nonagricultural
pursuits.
3. a density of population of at least 400
persons per square kilometer.
4. such urban settlement are also known as
census towns.
5. all other places with a municipality,
cooperation, cantonment board etc. are
regarded as urban area.
Which of the above statements are correct?
(a) Only 1, 2 & 3 (b) Only 2, 3, 4 & 5
(c) Only 1, 3, 4 & 5 (d) All of the above

 

3. Consider the following statements about the
Fiscal Policy.
1. Fiscal policy is the use of government
spending and taxation to influence the
economy.
2. The most immediate effect of fiscal policy
is to change the aggregate demand for
goods and services.
3. Fiscal policy is said to be loose or
expansionary when revenue is higher than
spending.
Which of the above statements are correct?
(a) Only 1 & 2 (b) Only 2 & 3
(c) Only 1 & 3 (d) All of the above

 

4. Consider the following statements about
unemployment:
1. Cyclical unemployment occurs when there
is not enough aggregate demand in the
economy to provide jobs for everyone who
wants to work.
2. Frictional unemployment occurs when a
labour market is unable to provide jobs for
everyone who wants one because there is
a mismatch between the skills of workers
and skills needed for jobs.
Which of the above statements is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 & 2 (d) Neither 1 nor 2

 

5. Consider the following statements about the
linked exchange rate system.
1. A linked exchange rate system is a type of
exchange rate regime to link the exchange
rate of a currency to another.
2. In this system government or central bank
actively interferes in the foreign exchange
market by controlling supply and demand
of the currency.
Which of the above statements is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 & 2 (d) Neither 1 nor 2

 

6. Consider the following statements about Fiscal
Deficit.
1. When a government’s total expenditures
exceed the revenue that it generates
including money from borrowings it is
called fiscal deficit.
2. A large fiscal deficit leads to a weaker
national currency.
Which of the above statements is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 & 2 (d) Neither 1 nor 2

 

7. Consider the following statements about the
Open Market Operations also known as OMO.
1. Open Market Operations include buying
and selling of government securities in the
open market.
2. Open market operations are the principal
tools of monetary policy.
3. Central government has the main
responsibility for implementing Open
market operations.
Which of the above statements are correct?
(a) Only 1 & 2
(b) Only 2 & 3
(c) Only 1 & 3
(d) All of the above

 

8. Consider the following statements about Special
Drawing Rights (SDR).
1. SDRs also called paper gold are
international financing instrument created
by the International Monetary Fund (IMF).
2. SDR is backed by currency or precious
metal.
Which of the above statements is/are correct?
(a) Only 1 (b) Only 2
(c) Both 1 & 2 (d) Neither 1 nor 2

 

9. As per RBI guidelines, which of the following
is covered under Nonperforming
Assets
(NPA)?
1. Non performing
asset (NPA) is a loan or
an advance where Interest and/ or
installment of principal remain overdue for
a period of more than a year in respect of
a term loan.
2. It is a loan or an advance where the
account remains ‘out of order’ in respect
of an Overdraft/Cash Credit.
Which of the above statements are correct?
(a) Only 1 (b) Only 2
(c) Both 1 & 2 (d) Neither 1 nor 2

 

10. The Rashtriya Krishi Vikas Yojana (RKVY)?
1. To incentivize the states so as to increase
public investment in Agriculture and allied
sectors.
2. To provide flexibility and autonomy to
states is in the process of planning and
executing Agriculture and allied sector
schemes.
3. To ensure the preparation of agriculture
plans for the districts and the states based
on agroclimatic
conditions availability of
technology and natural resources.
4. To achieve the goal of maximizing the yield
gaps in important crops, through focused
interventions.
Select the correct code:
(a) Only 1, 2 & 3 (b) Only 1, 3 & 4
(c) Only 2, 3 & 4 (d) Only 1, 2 & 4

Explanation

 

1. (c)
Exp.: They are used by Foreign Institutional
Investors (FIIs) who are NOT registered
with SEBI.

 

2. (c)
Exp.: At least 75% of only male working
population engaged in nonagricultural
pursuits.

 

3. (a)
Exp.: Fiscal policy is said to be tight or
contractionary when revenue is higher
than spending (i.e., the government budget
is in surplus).

 

4 (a)
Exp.: Frictional unemployment is the time period
between jobs when a worker is searching
for, or transitioning from one job to
another. It is sometimes called search
unemployment and can be voluntarily
based on the circumstances of the
unemployed individual. Structural
unemployment occurs when a labour
market is unable to provide jobs for
everyone who wants one because there is a
mismatch between the skills of workers and
skills needed for jobs.

 

5. (a)
Exp.: Unlike a fixed exchange rate system, the
government or central bank does not
actively interfere in the foreign exchange
market by controlling supply and demand
of the currency in order to influence the
exchange rate.

 

6. (c)
Exp.: When a government’s total expenditures
exceed the revenue that it generates
(excluding money from borrowings). Deficit
differs from debt, which is an accumulation
of yearly deficits. In milder forms high
inflation and a large fiscal deficit lead to a
weaker national currency (imports become
expensive) and reduce the
creditworthiness
of the country.

 

7. (a)
Exp.: An open market operation (also known as
OMO) is an activity by a central bank to
buy or sell government bonds in the open
market.

 

8. (a)
Exp.: It is not backed by any currency or precious
metal, and is used only among governments
and IMF for balance of payments
settlements.

 

9 (b)
Exp.: Non performing
asset (NPA) is a loan or
an advance where Interest and/or
installment of principal remain overdue for
a period of more than 90 days in respect of
a term loan.

 

10. (a)
Exp.: The RKVY aimed at achieving 4% annual
growth in the agriculture sector during the
XI Plan period by ensuring a holistic
development of Agriculture and allied
sector. One of its objective include to achieve
the goal of reducing the yield gaps in
important crops through focused
interventions.