Insights Static Quiz -245, 2019
Economy
INSIGHTS STATIC QUIZ 2019
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Question 1 of 5
1. Question
Which of the following statement about ‘White Label ATMs’ is correct?
Correct
Solution: a)
White Label ATMs – ATMs set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs).
Brown Label ATMs – ATMs where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.
Incorrect
Solution: a)
White Label ATMs – ATMs set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs).
Brown Label ATMs – ATMs where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.
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Question 2 of 5
2. Question
Sunil Mehta Committee is related to
Correct
Solution: c)
Sunil Mehta Committee was constituted to examine the setting up of an Asset Reconstruction Company (ARC) and/or Asset Management Company (AMC) for faster resolution of stressed assets.
Incorrect
Solution: c)
Sunil Mehta Committee was constituted to examine the setting up of an Asset Reconstruction Company (ARC) and/or Asset Management Company (AMC) for faster resolution of stressed assets.
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Question 3 of 5
3. Question
Which of the following factors can lead to Demand-pull inflation?
- Strong consumer demand
- Increase in money supply
- When prices go up
- Technological innovation
Select the correct code:
Correct
Solution: b)
When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up. Economists describe demand-pull inflation as a result of too many dollars chasing too few goods.
If a government reduces taxes, households are left with more disposable income in their pockets. This, in turn, leads to increased consumer spending, thus increasing aggregate demand and eventually causing demand-pull inflation.
Cost-push inflation is when prices go up.
Incorrect
Solution: b)
When the aggregate demand in an economy strongly outweighs the aggregate supply, prices go up. Economists describe demand-pull inflation as a result of too many dollars chasing too few goods.
If a government reduces taxes, households are left with more disposable income in their pockets. This, in turn, leads to increased consumer spending, thus increasing aggregate demand and eventually causing demand-pull inflation.
Cost-push inflation is when prices go up.
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Question 4 of 5
4. Question
A country can reduce its current account deficit by
- Improving domestic companies’ global competitiveness
- Decreasing the value of its exports relative to the value of imports
- Placing restrictions on imports, such as tariffs or quotas
Select the correct code:
Correct
Solution: c)
A country can reduce its current account deficit by increasing the value of its exports relative to the value of imports. It can place restrictions on imports, such as tariffs or quotas, or it can emphasize policies that promote exports, such as import substitution, industrialization or policies that improve domestic companies’ global competitiveness. The country can also use monetary policy to improve the domestic currency’s valuation relative to other currencies through devaluation, which reduces the cost of a country’s exports.
Current account deficit can imply that a country is spending “beyond its means”. Having a current account deficit is not inherently disadvantageous if a country uses external debt to finance investments that have a higher return than the interest rate on the debt.
Incorrect
Solution: c)
A country can reduce its current account deficit by increasing the value of its exports relative to the value of imports. It can place restrictions on imports, such as tariffs or quotas, or it can emphasize policies that promote exports, such as import substitution, industrialization or policies that improve domestic companies’ global competitiveness. The country can also use monetary policy to improve the domestic currency’s valuation relative to other currencies through devaluation, which reduces the cost of a country’s exports.
Current account deficit can imply that a country is spending “beyond its means”. Having a current account deficit is not inherently disadvantageous if a country uses external debt to finance investments that have a higher return than the interest rate on the debt.
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Question 5 of 5
5. Question
Consider the following statements:
- India’s tax-GDP ratio is very low compared to other developing countries or emerging markets
- Lower tax-GDP ratio can be addressed by mobilising greater tax revenues
Select the correct code:
Correct
Solution: b)
India’s tax-GDP ratio does not appear low when compared to other developing countries or emerging markets. India’s tax-GDP ratio appears respectable when compared to other developing countries or emerging markets.
Incorrect
Solution: b)
India’s tax-GDP ratio does not appear low when compared to other developing countries or emerging markets. India’s tax-GDP ratio appears respectable when compared to other developing countries or emerging markets.
