04 December Static Quiz 2021
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04 December 2021 – Static Quiz for UPSC Prelims
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- Question 1 of 5
1. Question
Which among the following increases the demand for rupee in the forex market?
1) When the interest rate in India increases
2) Increase in imports
3) Foreigners travelling to India.
Select the correct answer using the code given below.CorrectIncrease in imports causes an increase in demand for dollars which results in decline in value of Indian currency. Hence statement 2 is incorrect.
When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation. Hence statement 1 is correct.
When foreigners travelling to India, the demand for rupee increases. Hence statement 3 is correct.
IncorrectIncrease in imports causes an increase in demand for dollars which results in decline in value of Indian currency. Hence statement 2 is incorrect.
When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation. Hence statement 1 is correct.
When foreigners travelling to India, the demand for rupee increases. Hence statement 3 is correct.
- Question 2 of 5
2. Question
Which among the following correctly describes the term ‘dirt floating’?
CorrectDirty Floating: In the dirty float system, the exchange rate is to a very large extent is determined by the market forces of demand and supply (so far identical to clean floating), but occasionally the central banks of the countries intervene in foreign exchange markets to smoothen or remove excessive fluctuations from the foreign exchange markets.
IncorrectDirty Floating: In the dirty float system, the exchange rate is to a very large extent is determined by the market forces of demand and supply (so far identical to clean floating), but occasionally the central banks of the countries intervene in foreign exchange markets to smoothen or remove excessive fluctuations from the foreign exchange markets.
- Question 3 of 5
3. Question
Which among the following statement is incorrect?
CorrectThere is no international authority which directs that trade between two countries should happen only with some specific currencies. Any two countries are free to transact with any currency if they are willing.
If India wants to measure its export competitiveness with all its trading partners then it calculates Real Effective Exchange Rate which is a weighted average (weights being the shares in foreign trade with respective countries) of the Real Exchange Rates of its different trading partners.
If real effective exchange rate appreciates that means it moves from 2 to 1 (in the example above) which means export competitiveness of Indian products will start reducing.
A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. (G-Secs are issued through auctions conducted by RBI. Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI).IncorrectThere is no international authority which directs that trade between two countries should happen only with some specific currencies. Any two countries are free to transact with any currency if they are willing.
If India wants to measure its export competitiveness with all its trading partners then it calculates Real Effective Exchange Rate which is a weighted average (weights being the shares in foreign trade with respective countries) of the Real Exchange Rates of its different trading partners.
If real effective exchange rate appreciates that means it moves from 2 to 1 (in the example above) which means export competitiveness of Indian products will start reducing.
A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or the State Governments. (G-Secs are issued through auctions conducted by RBI. Auctions are conducted on the electronic platform called the E-Kuber, the Core Banking Solution (CBS) platform of RBI). - Question 4 of 5
4. Question
A category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market is called?
CorrectStructural Unemployment:
It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
Many people in India do not get job due to lack of requisite skills and due to poor education level, it becomes difficult to train them.IncorrectStructural Unemployment:
It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
Many people in India do not get job due to lack of requisite skills and due to poor education level, it becomes difficult to train them. - Question 5 of 5
5. Question
The term ‘Inverted Duty Structure’ refers to
CorrectThe term ‘Inverted Duty Structure’ refers to a situation where the rate of tax on inputs purchased is more than the rate of tax on outward supplies (or finished products). This is the result of several tax rates of 0%, 5%, 12%, 18% and 28% in our GST structure. For example, on “Paper” we have 5% GST rate but on Books (a finished product) we have 0% GST rate, so it is a classic case of inverted duty structure.
This creates problem in claiming input tax credit as the supplier in the chain pays taxes on inputs purchased but he does not collect taxes from the outward supplies.
IncorrectThe term ‘Inverted Duty Structure’ refers to a situation where the rate of tax on inputs purchased is more than the rate of tax on outward supplies (or finished products). This is the result of several tax rates of 0%, 5%, 12%, 18% and 28% in our GST structure. For example, on “Paper” we have 5% GST rate but on Books (a finished product) we have 0% GST rate, so it is a classic case of inverted duty structure.
This creates problem in claiming input tax credit as the supplier in the chain pays taxes on inputs purchased but he does not collect taxes from the outward supplies.
