10 December Static Quiz 2021
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10 December 2021 – Static Quiz for UPSC Prelims
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- Question 1 of 5
1. Question
Fiscal policy is an important constituent of the overall economic framework of a country. It mainly includes which of the following?
1) Taxation
2) Expenditure
3) Debt management
4) Disinvestment strategies
Which of the above statements is/are correct?CorrectFiscal policy is not only about tax, but it also includes investment/disinvestment strategies, expenditure and debt management.
Fiscal policy deals with the taxation and expenditure decisions of the government. Fiscal policy is composed of several parts.
These include, tax policy, expenditure policy, investment or disinvestment strategies and debt or surplus management.
Fiscal policy is an important constituent of the overall economic framework of a country and is therefore intimately linked with its general economic policy strategy.IncorrectFiscal policy is not only about tax, but it also includes investment/disinvestment strategies, expenditure and debt management.
Fiscal policy deals with the taxation and expenditure decisions of the government. Fiscal policy is composed of several parts.
These include, tax policy, expenditure policy, investment or disinvestment strategies and debt or surplus management.
Fiscal policy is an important constituent of the overall economic framework of a country and is therefore intimately linked with its general economic policy strategy. - Question 2 of 5
2. Question
A type of unemployment that occurs from the inevitable time delays in finding new employment in a free market is called?
CorrectFrictional unemployment is unemployment that occurs from the inevitable time delays in finding new employment in a free market. It may also be called ‘search unemployment as it relates to the time taken to search for new employment. For example, if you graduate from university, you can’t necessarily expect to find a job straight away which matches your skills.
This period of searching for a job is known as frictional unemployment. Frictional unemployment will also occur when people are switching between jobs, either because they have been made redundant or are looking for new employment.IncorrectFrictional unemployment is unemployment that occurs from the inevitable time delays in finding new employment in a free market. It may also be called ‘search unemployment as it relates to the time taken to search for new employment. For example, if you graduate from university, you can’t necessarily expect to find a job straight away which matches your skills.
This period of searching for a job is known as frictional unemployment. Frictional unemployment will also occur when people are switching between jobs, either because they have been made redundant or are looking for new employment. - Question 3 of 5
3. Question
The main objective of the 12th Five- Year Plan is
Correct12th Five Year Plan of the Government of India (2012-17) aims at faster, sustainable and more inclusive growth.
Incorrect12th Five Year Plan of the Government of India (2012-17) aims at faster, sustainable and more inclusive growth.
- Question 4 of 5
4. Question
With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
1) Foreign direct investment
2) Investment income
3) Invisible trade
4) Merchandise transactions
Which of the above statements is/are correct?CorrectBalance of payments (BOP):
The balance of payments (BOP) refers to the systematic record of all the financial and economic transactions made by the residents of the country with the rest of the world.Components of the Balance of payments (BOP)
Current account: It includes the financial transactions dealing with the export and import of goods, services, unilateral transfers, investment income etc.
Capital account: It includes the financial transactions dealing with assets such as foreign direct investment, foreign portfolio investment, foreign loans etc.
Official reserve transactions:It conducted by the central bank in case of the BOP deficit or BOP surplus.
Errors and omissions: It is the element of BOP (other than the current account and the capital account) which refers to the balancing items reflecting the inability to record all the international financial transactions.IncorrectBalance of payments (BOP):
The balance of payments (BOP) refers to the systematic record of all the financial and economic transactions made by the residents of the country with the rest of the world.Components of the Balance of payments (BOP)
Current account: It includes the financial transactions dealing with the export and import of goods, services, unilateral transfers, investment income etc.
Capital account: It includes the financial transactions dealing with assets such as foreign direct investment, foreign portfolio investment, foreign loans etc.
Official reserve transactions:It conducted by the central bank in case of the BOP deficit or BOP surplus.
Errors and omissions: It is the element of BOP (other than the current account and the capital account) which refers to the balancing items reflecting the inability to record all the international financial transactions. - Question 5 of 5
5. Question
An increase in Cash Reserve Ratio by Reserve Bank would have which of the following implications?
1) Increase lending capacity of banks
2) Discourage borrowers from applying for loans
3) Increased Money supply in the economy
Select the correct answer using the code given below.CorrectIf there is an increase in the cash reserve ratio, a bank will a low lending capacity in terms of funds. Hence, banks will ask more people to open deposits in their bank accounts. Banks will also raise the interest rate and this step will discourage borrowers from applying for loans due to the increased interest rate.
IncorrectIf there is an increase in the cash reserve ratio, a bank will a low lending capacity in terms of funds. Hence, banks will ask more people to open deposits in their bank accounts. Banks will also raise the interest rate and this step will discourage borrowers from applying for loans due to the increased interest rate.
