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1.As per WTO norms, which of the following Tariffs are used by countries for International trade?

1. Bound Tariff

2. Applied Tariff

3Preference Tariff

Select the correct option from codes given below:

1 & 2 Only 3 Only 2 & 3 Only 1, 2 & 3

Correct Answer: D [ 1, 2 & 3 ]

Notes: Bound tariffs are specific commitments made by individual WTO member governments. The bound tariff is the maximum MFN tariff level for a given commodity line. Preference tariff is the tariff imposed by countries on goods and services one preferential trade agreement. Applied Tariff is the actual tariff applied by a country on a particular good or service, thus, there exist a difference between the bound tariff rate and applied tariff rate which is called water.

2.Consider the following statements about the term “Standing Deposit Facility”, which was recently in news?

1. It is a new monetary instrument by RBI to suck out liquidity from the market

2. It does not require the provision of collateral for liquidity absorption

Which of the above statements is/are correct?

Only 1 Only 2 Both 1 & 2 Neither 1 nor 2

Correct Answer: C

Notes: Generally, when banks need funds for short term they borrow from RBI at Repo Rate. Similarly, when banks have excess funds, they lend it to RBI at the reverse repo rate. In both cases RBI uses government securities as collateral. But Standing Deposit Facility is an initiative by RBI to absorb surplus funds from banks without issuing collaterals to them. Why RBI using Standing Deposit Facility? Demonetisation exercise has deposited nearly Rs 14 lakh crore in banks. Now, banks can disburse this money to RBI as CRR, maintain a portion in the form SLR, and can even lend it to public in the form of loan. But lending such huge amount will increase the money supply in Indian market that can lead to inflation. To cope up with the problem, RBI increased the CRR rate and allowed the banks to keep maximum amount with RBI. For CRR, RBI requires to issue collaterals in the form of government securities. Since it was very difficult for RBI to issue collaterals to absorb such huge amount of liquid money from commercial banks, the government decided to go with the concept of Standing Deposit Facility which will allow the RBI to absorb surplus funds from banks without collateral. Banks can even earn interest by depositing in the form of Standing Deposit Facility to RBI.

3.. Consider the following statements about the Varishtha Pension Bima Yojana 2017:

1.The scheme will be implemented through Life Insurance Corporation of India (LIC)

2.The scheme will provide an assured pension based on a guaranteed rate of return of 8% per annum for ten years

Which of the above statements is/are correct?

1 Only 2 Only Both 1 & 2 Neither 1 nor 2

Correct Answer: C

Notes: Both are correct statementsThe scheme will be implemented through Life Insurance Corporation of India (LIC). The scheme will provide an assured pension based on a guaranteed rate of return of 8% per annum for ten years, with an option to opt for pension on a monthly / quarterly / half yearly and annual basis. The differential return, i.e., the difference between the return generated by LIC and the assured return of 8% per annum would be borne by Government of India as subsidy on an annual basis.

4.With reference to the National Rural Livelihood Mission (NRLM), which among the following statements is / are correct? 1. It aims to bring at least one member of rural poor families under the Self Help Groups network 2. NRLM implementation is in a Mission Mode 3. NRLM is predominantly a demand driven scheme 4. There is a provision for coverage of a minimum of 3% of disabled persons out of the total number of beneficiaries assisted Choose the correct option from the codes given below:

Only 1, 2 & 3 Only 2, 3 & 4 Only 1, 2 & 4 1, 2, 3 & 4

Correct Answer: D <1, 2, 3 & 4>

5. Which of the following rate is charged by banks to their most credit worthy customers?

Prime Lending Rate Repo Rate Statutory Liquidity Rate Bank Rate

Correct Answer: A

Notes: A prime rate or prime lending rate is an interest rate used by banks, usually the interest rate at which banks lend to favoured customers—i.e., those with good credit.

6. Which among the following is a direct tax?

Corporate tax Wealth tax Income tax All of the above

Correct Answer: D

Notes: Direct tax is a government levy on the income, property, or wealth of people or companies. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to another entity. Examples include corporation tax, income tax, and social security contributions.

7. The Insurance Regulatory and Development Authority (IRDA) is which type of body?

Constitutional Body Statutory Body Non Governmental Organization Advisory Body

Correct Answer: B

Notes: Insurance Regulatory and Development Authority (IRDA) is a statutory body set up for protecting the interests of the policyholders and regulating, promoting and ensuring orderly growth of the insurance industry in India.

8. What is an inferior good?

Demand of a good decreases with increases in peoples income Demand of a good increases with increases in peoples income Demand of a good decreases with decrease in peoples income Demand of a good increase with decrease in peoples income

Correct Answer: A

Notes: An inferior good is an economic term that describes a good whose demand drops when people’s incomes rise. This occurs when a good has more costly substitutes that see an increase in demand as incomes and the economy improve. Inferior goods are the opposite of normal goods where in normal goods, a consumer would demand less of if they had a higher level of real income.

9. What does a good with positive externalities known as?

Giffen goods Public goods Merit goods Snob good

Correct Answer: C

Notes: Merit goods are the goods that are provided generally by the government to certain sections of society. Unlike in the case of pure public goods, merit goods are not provided to the entire society; rather they are given to certain targeted people. They Have positive externalities Ex: health, education

10. Which of the following programmes by government aims to install solar street lights in rural, semi-urban and urban areas which still don’t enjoy adequate coverage of power grid?

Atal Jyoti Yojna (AJAY) National Programme on Solar Thermal UJALA scheme Surya Mitra Yojna

Correct Answer: A

Notes: Atal Jyoti Yojna (AJAY) scheme is an initiative by the Ministry of New and Renewable Energy under which, high mast solar-powered LED street lights will be installed in areas that don’t have an adequate power supply. The implementation will be undertaken by Energy Efficiency Services Limited (EESL), which is an energy service company (ESCO) of the Government of India EESL.

11. Who among the following is the first woman to head a public sector bank?

Shikha Sharma Chanda Kochar Arundhati Bhattacharya Usha Ananthasubramanyan

Hide Answer

Correct Answer: C

Notes: Arundhati Bhattacharya is a retired Indian banker and former Chairman of the State Bank of India. She was the first woman to be the Chairman of State Bank of India.

12. Which among the following countries have traditional economic system?

India USA Germany None of the above

Correct Answer: D

Notes: This traditional economy is suited to underdevelop and developing economies. Even today such economies can be found in some pockets of Africa and the Middle East. India and Germany follows a mixed economic system while USA follows capitalist system.

13. Which of the following are the reasons for the economic crisis in 1991?

1. Huge fiscal imbalances

2. High level of borrowing

3. High Exports

4. High Imports

Choose the correct option from the codes given below:

1,2 and 3 only 1 and 2 only 1,2 and 4 only All the above

Correct Answer: C <1,2 and 4 only>

Notes: India experienced its worst economic crisis in 1991. A high fiscal deficit combined with a high level of borrowing lead to a crisis. The exports were low and imports were high. India liberalized its economy to deal with the situation.

14. Who is the author of the ‘Planned economy for India’?

M.K.Gandhi Pandit Nehru Sardar Vallabhai Patel M. Visvesvaraya

Correct Answer: D

Notes: M. Visvesvaraya, a noted engineer and politician, in 1934 authored the book, ‘Planned Economy for India’. The book has a brief of the Indian situation in its economic aspects and to urge, in respect of the problems before the country, the adoption of certain courageous solutions based on recent world experience.

15. Which kind of economy for India does Niti Aayog aim to exploit its long coastline?

Blue Green Ocean Marine

Correct Answer: A

Notes: Niti Aayog has initiated the idea to leverage India’s status as a major maritime nation with a long coastline and the potential to become a key blue economy. India has a 7500 km long coastline which it sees as a potential area.

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