TEST 01: ECONOMY
TEST 01: ECONOMY
Syllabus: National income
1. Consider the following statements:
1. GNP=GDP + Net factor income from abroad
2. Net National Product at factor cost is “National Income”
3. National Disposable Income=Net National product at market prices + other current transfers from the rest of the world.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3only
(c) 1, 2 and 3
(d) 1 and 3 only
2. Consider the following statements:
1. Real GDP is calculated in a way such that the goods and services are evaluated at constant prices.
2. Nominal GDP is the value of GDP at the current prevailing prices.
3. The ratio of Real GDP to Nominal is known as Index of prices (GDP Deflator) which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 3 only
3. Choose the false statement among the following statements:
(a) Consumer Price Index (CPI) is the index of prices of a given basket of commodities which are bought by the representative consumer.
(b) The weights of representative goods are constant in GDP Deflator– but they differ according to production level of each good in CPI.
(c)The index for wholesale prices is called Wholesale Price Index (WPI), in USA it is referred to as Producer Price Index (PPI).
(d) CPI includes prices of goods consumed by the representative consumer, hence it includes prices of imported goods. GDP deflator does not include prices of imported goods.
4. Choose the false statement among the following statements:
(a)Demand of money=Transaction demand + Speculative demand
(b)Transaction demand ∝ Real GDP + Price level
(c)Speculative demand ∝ 1/Market rate of Interest
(d)When the market rate of interest is minimum, speculative demand for money is zero
5. The total liability of the monetary authority of the country (RBI) is called as
(a) monetary base
(b) high powered money
(c) both (a) and (b)
(d) None of these
6. Consider the following pairs:
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Demand deposit : Saving deposit & Current account deposits
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Time deposit : Fixed deposit
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Legal tenders : Cheques
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Fiat money : Currency notes and coin
which of the above pairs are correctly matched?
(a) 1,2 and 3only
(b) 2 and 3 only
(c) 3 and 4 only
(d) 1, 2 and 4 only
7. Currency notes and coins are called Fiat money because
(a) they do not have intrinsic value like gold or silver
(b) made on special imported paper
(c) they are printed by government
(d) exchanged for goods and services
8. ________ is the most commonly used to measure money supply, also known as Aggregate monetary resources.
(a) M1
(b) M2
(c) M3
(d) M4
9. The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3 and M4.
M1=Currency with public + demand deposits
M2=M1+saving deposits with Post Office saving banks
M3=M1+Net time deposits of commercial banks
M4=M3+Total deposits with Post office saving organization (excluding National saving Certificates)
Which among these options represents the narrow money?
(a) M2 and M3
(b) M1 and M2
(c) M3 and M4
(d) M1 and M4
10. Which of the following is used to denote broad money?
(a) M1
(b) M2
(c) M3
(d) M4
11. Consider the following statements with reference to GDP and GNI
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In a perfectly closed economy GDP = GNI
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GNI for any country is always greater than GDP
Which of the above statements is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
12. Which is not added in the calculation of national income of India?
(a) The value of goods and services
(b) The sold value of the old fridge
(c) Services rendered by the housewives
(d) Both b & c
13. If the contribution of the agricultural sector is decreasing in a country’s economy, then what conclusion can be drawn?
(a) The country is growing in the direction of being a developed nation
(b) The country is moving towards becoming developing nation
(c) The country is moving towards becoming less developed nation
(d) The economic growth rate of the country has stopped
14. PARIWARTAN Scheme and SAMADHAN Scheme are associated with:
(a) Resolutions of bad loans among the public sector banks.
(b) Resolutions of bad loans in power sector.
(c) Disinvestment of the public sector enterprises.
(d) Proposed Voluntary retirement scheme packages for the employees of soon to be privatized Air India and IDBI Bank.
15. A perfectly competitive market has
(a) Firms that set their own prices
(b) Only one seller
(c) Many buyers and sellers
(d) Only one buyer
Answers
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C
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A
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B
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D
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C
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D
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A
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C
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B
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C
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A
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D
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A
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B
Power Asset Revival through Warehousing and Rehabilitation (Pariwartan) = Financial intermediaries will setup a company, that will take over the bad loans of power sector from the other banks / NBFCs- to prevent these loans from falling into the Insolvency and Bankruptcy code. [Otherwise, the said power company might get liquidated- then it’ll affect longterm power generation in India]
Scheme of Asset Management and Debt Change Structure (SAMADHAN) = Power company’s stressed loan amount is divided into two parts- the manageable amount kept as debt, while unmanageable amount (debt) converted into equities (shares) and given to the respective lender bank. So, IF & when Power Company makes profit, they’ll share dividend with the banks.
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C
