Static Quiz 08 October 2022
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Static Quiz 08 October 2022 for UPSC Prelims
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- Question 1 of 5
1. Question
Which of the following Government expenditures is/are ‘Transfer Payments’?
1. Subsidies
2. Old Age Pension
3. Procurement of defence equipment
4. Interest payments on loans
Select the correct answer using the code given below.CorrectAnswer: B
A transfer payment is a process used by governments as a way to redistribute money through programs
such as old age or disability pensions, student grants and unemployment compensation. Transfer
payments, however, does not include subsidies that are paid to domestic farmers, manufacturers and
exporters, even though they are technically a one-way payment to a person on behalf of the government.Non-transfer expenditure includes development as well as non-development expenditure that results in
creation of output directly or indirectly. It includes economic infrastructure such as power, transport,
irrigation etc.; Social infrastructure such as education, health and family welfare, law and order and
defence, public administration etc.IncorrectAnswer: B
A transfer payment is a process used by governments as a way to redistribute money through programs
such as old age or disability pensions, student grants and unemployment compensation. Transfer
payments, however, does not include subsidies that are paid to domestic farmers, manufacturers and
exporters, even though they are technically a one-way payment to a person on behalf of the government.Non-transfer expenditure includes development as well as non-development expenditure that results in
creation of output directly or indirectly. It includes economic infrastructure such as power, transport,
irrigation etc.; Social infrastructure such as education, health and family welfare, law and order and
defence, public administration etc. - Question 2 of 5
2. Question
Expenditure method of national income accounting takes into account, which of the
following expenditures?
1. Investment expenditure
2. Government expenditure on pensions and scholarship
3. Expenditure on shares and bonds
Select the correct answer using the code given below.CorrectAnswer: D
National income is measured in terms of expenditure on purchase of final goods and services produced in
the economy during an accounting year.However, government expenditure on widow pensions and scholarships are like a transfer
payments not included in accounting national income as they do not cause any value addition in
the economy.However, expenditure on shares and bonds is not included in total expenditure as these are
mere paper claims and are not related to production of final goods and services. Such
expenditure do not cause any value addition.IncorrectAnswer: D
National income is measured in terms of expenditure on purchase of final goods and services produced in
the economy during an accounting year.However, government expenditure on widow pensions and scholarships are like a transfer
payments not included in accounting national income as they do not cause any value addition in
the economy.However, expenditure on shares and bonds is not included in total expenditure as these are
mere paper claims and are not related to production of final goods and services. Such
expenditure do not cause any value addition. - Question 3 of 5
3. Question
With reference to Capital Account Convertibility, consider the following statements:
1. It refers to the freedom to convert local financial assets into foreign financial
assets and vice versa at market determined rates of exchange.
2. Presently India has full capital account convertibility.
Which of the statements given above is/are correct?CorrectAnswer: A
Presently, India has full current account convertibility. This means one can import and export goods or
receive or make payments for services rendered. However, full capital account convertibility i.e.
investments and borrowings are restricted. Hence, statement 2 is not correct.IncorrectAnswer: A
Presently, India has full current account convertibility. This means one can import and export goods or
receive or make payments for services rendered. However, full capital account convertibility i.e.
investments and borrowings are restricted. Hence, statement 2 is not correct. - Question 4 of 5
4. Question
Which of the following is levied on imported goods to offset subsidies made to producers
in the exporting country?CorrectAnswer: D
IncorrectAnswer: D
- Question 5 of 5
5. Question
In the context of banking, currency deposit ratio (cdr) refers to the ratio of
CorrectAnswer: D
IncorrectAnswer: D
