Static Quiz 10 October 2022
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Static Quiz 10 October 2022 for UPSC Prelims
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- Question 1 of 5
1. Question
When the government increases spending by borrowing today, which will be repaid by
taxes in the future, it will have the same impact on the economy as an increase in
government expenditure that is financed by a tax increase today.
Which of the following theories is best described by the above passage?CorrectAnswer: B
IncorrectAnswer: B
- Question 2 of 5
2. Question
Why is Gross National Product (GNP) a better measure of national income than Gross Domestic Product (GDP)?
1. GNP reflects an economy’s interconnection and interdependence on world economy, which is not captured by GDP.
2. GNP includes the idea of depreciation of national capital that is not accounted by GDP.
3. GNP accounts for the population headcount in the nation that GDP does not include.Select the correct answer using the codes below.
CorrectThe normal formula is GNP = GDP Income from Abroad. But it becomes GNP = GDP (—Income from
Abroad) = GDP — Income from Abroad, in the case of India.
IFA usually includes remittances, trade balance and interest on external loans.
This is because usually the IFA component of India is negative. So, India’s GNP is generally lower than its GDP.
The different uses of the concept GNP are as given below:
1. This is the ‘national income’ according to which the IMF ranks the nations of the world in terms of the volumes—at Purchasing Power Parity (at PPP).
2. It is the more exhaustive concept of national income than the GDP as it indicates towards the ‘quantitative ‘as well as the ‘qualitative ‘aspects of the economy, i.e., the ‘internal’ as well as the ‘external’ strength of the economy.
3. It enables us to learn several facts about the production behaviour and pattern of an economy, such as, how much the outside world is dependent on its product and how much it depends on the world for the same (numerically shown by the size and net flow of its ‘balance of trade’) etc.IncorrectThe normal formula is GNP = GDP Income from Abroad. But it becomes GNP = GDP (—Income from
Abroad) = GDP — Income from Abroad, in the case of India.
IFA usually includes remittances, trade balance and interest on external loans.
This is because usually the IFA component of India is negative. So, India’s GNP is generally lower than its GDP.
The different uses of the concept GNP are as given below:
1. This is the ‘national income’ according to which the IMF ranks the nations of the world in terms of the volumes—at Purchasing Power Parity (at PPP).
2. It is the more exhaustive concept of national income than the GDP as it indicates towards the ‘quantitative ‘as well as the ‘qualitative ‘aspects of the economy, i.e., the ‘internal’ as well as the ‘external’ strength of the economy.
3. It enables us to learn several facts about the production behaviour and pattern of an economy, such as, how much the outside world is dependent on its product and how much it depends on the world for the same (numerically shown by the size and net flow of its ‘balance of trade’) etc. - Question 3 of 5
3. Question
Which of the following is/are the characteristic features of ‘legal tender’ in India?
1. They cannot be refused by any citizen of the country for settlement of any kind of transaction.
2. It has its own intrinsic value.
3. All legal tenders are issued by the Reserve Bank of India.
Select the correct answer using the code given below.CorrectAnswer: A
Currency notes are issued by RBI, coins are issued by the central government. Hence
statement 3 is not correct.They do not have intrinsic value like gold or silver coin.
IncorrectAnswer: A
Currency notes are issued by RBI, coins are issued by the central government. Hence
statement 3 is not correct.They do not have intrinsic value like gold or silver coin.
- Question 4 of 5
4. Question
With reference to Initial Public Offering (IPO), consider the following statements:
1. It is the offering of a stock of a company for the first time in the secondary capital
market.
2. Foreign Institutional Investor (FII) are allowed to invest only in listed or to-be listed entities.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2CorrectAnswer: B
When a company publicly sells new stocks and bonds for the first time, it does so in the primary
capital market. This market is also called the new issues market. In many cases, the new issue takes the
form of an initial public offering (IPO).Foreign Institutional Investor (FII)
could invest in the securities in the primary and secondary markets including shares, debentures
and warrants of companies unlisted, listed or to be listed on a recognized stock exchange in India.IncorrectAnswer: B
When a company publicly sells new stocks and bonds for the first time, it does so in the primary
capital market. This market is also called the new issues market. In many cases, the new issue takes the
form of an initial public offering (IPO).Foreign Institutional Investor (FII)
could invest in the securities in the primary and secondary markets including shares, debentures
and warrants of companies unlisted, listed or to be listed on a recognized stock exchange in India. - Question 5 of 5
5. Question
As per the presently followed system, Gross National Income (GDP) at Constant and Current Prices in India will be equal in which of the following financial years?
CorrectSolution: d)
Justification: Constant prices are calculated at 2011-12 prices as per the latest series, and Current prices can only be equal to constant prices in the year series which it starts from, i.e. 2011-12IncorrectSolution: d)
Justification: Constant prices are calculated at 2011-12 prices as per the latest series, and Current prices can only be equal to constant prices in the year series which it starts from, i.e. 2011-12
