Static Quiz 04 August 2023
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Static Quiz 04 August 2023 for UPSC Prelims
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- Question 1 of 5
1. Question
Which of the following is/are the components used to derive Personal Income (PI)?
1. National Income (NI)
2. Undistributed profits
3. Net interest payments made by households
4. Corporate tax
5. Transfer payments
Select the correct answer using the code given below:CorrectCorrect Answer : D
IncorrectCorrect Answer : D
- Question 2 of 5
2. Question
Consider the following statements regarding Nominal GDP
1. Nominal GDP is calculated in a way such that the goods and services are evaluated at some
constant set of prices.
2. Base year is the year whose prices are being used to calculate the Nominal GDP.
Which of the statements given above is/are correct?CorrectCorrect Answer : D
Real GDP is calculated in a way such that the goods and services are evaluated at some constant set of prices (or constant prices). Hence, statement 1 is incorrect.
Notice that the ratio of nominal GDP to real GDP gives us an idea of how the prices
have moved from the base year (the year whose prices are being used to calculate the
real GDP) to the current year. Hence, statement 2 is incorrect.IncorrectCorrect Answer : D
Real GDP is calculated in a way such that the goods and services are evaluated at some constant set of prices (or constant prices). Hence, statement 1 is incorrect.
Notice that the ratio of nominal GDP to real GDP gives us an idea of how the prices
have moved from the base year (the year whose prices are being used to calculate the
real GDP) to the current year. Hence, statement 2 is incorrect. - Question 3 of 5
3. Question
Consider the following statements regarding CPI and GDP deflator
1. The weights are constant in both CPI and GDP deflator.
2. The goods purchased by consumers (CPI) do not represent all the goods which are produced in
a country.
3. GDP deflator does not include prices of imported goods.
How many of the given statements are correct?CorrectCorrect Answer : B
The goods purchased by consumers do not represent all the goods which are
produced in a country. GDP deflator takes into account all such goods and services.
Hence, statement 2 is correct.IncorrectCorrect Answer : B
The goods purchased by consumers do not represent all the goods which are
produced in a country. GDP deflator takes into account all such goods and services.
Hence, statement 2 is correct. - Question 4 of 5
4. Question
Consider the following statements regarding Open Market Operations
1. Open Market Operations refers to buying and selling of bonds issued by the Government in the
open market.
2. Selling of a bond by RBI leads to increases in the total amount of reserves in the economy and
thus increases the money supply.
Which of the statements given above is/are correct?CorrectCorrect Answer : A
Selling of a bond by RBI (to private individuals or institutions) leads to reduction in quantity of reserves and hence the money supply. Hence, statement 2 is incorrect.IncorrectCorrect Answer : A
Selling of a bond by RBI (to private individuals or institutions) leads to reduction in quantity of reserves and hence the money supply. Hence, statement 2 is incorrect. - Question 5 of 5
5. Question
Which of the following forms the part of assets of any bank?
1. Reserves
2. Loans
3. Deposits
Which of the statements given above are correct?CorrectCorrect Answer : A
Liabilities for any firm are its debts or what it owes to others. For a bank, the main
liability is the deposits which people keep with it. Hence, statement 3 is incorrect.IncorrectCorrect Answer : A
Liabilities for any firm are its debts or what it owes to others. For a bank, the main
liability is the deposits which people keep with it. Hence, statement 3 is incorrect.
