Insights Static Quiz -399, 2019–Economy

Solution: b)

STRUCTURAL CHANGE represents the fundamental CHANGES that occurring in the basic features of the ECONOMY over a long period. STRUCTURE of the ECONOMY MEANS the occupational STRUCTURE, sectoral distribution of income, industrial pattern, composition of exports, saving- GDP ratio etc.

Due to LPG reforms, largely agriculture-based economy has transformed into service-based economy in subsequent years or decades.

Solution: c)

Twin balance sheet problem refers to the stress on balance sheets of banks due to nonperforming assets (NPAs) or bad loans on the one hand, and heavily indebted corporates on the other.

Solution: c)

Bank rate is the rate charged by the central bank for lending funds to commercial banks.

Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks. In order to curb liquidity, the central bank can resort to raising the bank rate and vice versa.

Base rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers.

Solution: c)

Call money rate is the rate at which short term funds are borrowed and lent in the money market.

The duration of the call money loan is 1 day. Banks resort to these types of loans to fill the asset liability mismatch, comply with the statutory CRR and SLR requirements and to meet the sudden demand of funds. RBI, banks, primary dealers etc are the participants of the call money market. Demand and supply of liquidity affect the call money rate. A tight liquidity condition leads to a rise in call money rate and vice versa.

Solution: d)

Agricultural Produce Market Committee (APMC) is a statutory market committee constituted by a State Government in respect of trade in certain notified agricultural or horticultural or livestock products, under the Agricultural Produce Market Committee Act issued by that state government.

APMCs are intended to be responsible for:

• ensuring transparency in pricing system and transactions taking place in market area;
• providing market-led extension services to farmers;
• ensuring payment for agricultural produce sold by farmers on the same day;
• promoting agricultural processing including activities for value addition in agricultural produce;
• Publicizing data on arrivals and rates of agricultural produce brought into the market area for sale; and
• Setup and promote public private partnership in the management of agricultural markets