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Question 1 of 5
1. Question
1 points
Consider the following statements: 1. During the Dis-inflation, prices of commodities decrease. 2. During the Deflation, Inflation rate turns negative. 3. The situation of Stagflation in an economy is best described by rising inflation, low level of unemployment, and low growth rate. Which of the statements given above is/are correct?
Correct
Right Answer: C
Exp:
• Statement 1 is incorrect. Dis-inflation is a temporary slowing of the pace of price inflation. It is used to describe instances when the inflation rate has reduced marginally over the short term. It should not be confused with deflation, which can be harmful to the economy. Disinflation is a temporary slowing of the pace of price inflation. Thus, unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation.
• Statement 2 is correct. Deflation is the general decline of the price level of goods and services. It is typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time. • Statement 3 is incorrect. Stagflation is said to happen when an economy faces stagnant growth as well as persistently high inflation. With stalled economic growth, unemployment tends to rise and existing incomes do not rise fast enough and yet, people have to contend with rising inflation.
Incorrect
Right Answer: C
Exp:
• Statement 1 is incorrect. Dis-inflation is a temporary slowing of the pace of price inflation. It is used to describe instances when the inflation rate has reduced marginally over the short term. It should not be confused with deflation, which can be harmful to the economy. Disinflation is a temporary slowing of the pace of price inflation. Thus, unlike inflation and deflation, which refer to the direction of prices, disinflation refers to the rate of change in the rate of inflation.
• Statement 2 is correct. Deflation is the general decline of the price level of goods and services. It is typically associated with a contraction in the supply of money and credit in the economy. During deflation, the purchasing power of currency rises over time. • Statement 3 is incorrect. Stagflation is said to happen when an economy faces stagnant growth as well as persistently high inflation. With stalled economic growth, unemployment tends to rise and existing incomes do not rise fast enough and yet, people have to contend with rising inflation.
Question 2 of 5
2. Question
1 points
Consider the following statements: 1. Purchasing Power Parity (PPP) exchange rates are calculated by the prices of the same basket of goods and services in different countries. 2. Purchasing Power Parity is most suitable for the expression of short-term exchange rates. 3. In terms of PPP dollars, India is the fifth-largest economy in the world. Which of the statements given above is/ are correct?
Correct
Right Answer: A
Exp:
Statement 1 is correct. Purchasing power parity is an economic term for measuring prices at different locations/countries. PPP compares different countries' currncies through a "basket of goods" approach.
According to this concept, two currencies are in equilibrium—known as the currencies being at par—when a basket of goods is priced the same in both countries, taking into account the exchange rates.
Statement 2 is incorrect. The PPP exchange rate may not match the market exchange rate. The market rate is more volatile because it reacts to changes in demand at each location. In addition, tariffs and difference in the price of labor can contribute to longer-term differences between the two rates. One use of PPP is to predict longer-term exchange rates.
PPP has been found more useful for comparing differences in living standards among nations. Earlier, the comparison was based on per capita income, but this was abandoned by most of the international organizations, because it was giving a misleading picture.
Statement 3 is incorrect. India ranks third when GDP is compared in terms of purchasing power parity at $11.33 trillion.
Incorrect
Right Answer: A
Exp:
Statement 1 is correct. Purchasing power parity is an economic term for measuring prices at different locations/countries. PPP compares different countries' currncies through a "basket of goods" approach.
According to this concept, two currencies are in equilibrium—known as the currencies being at par—when a basket of goods is priced the same in both countries, taking into account the exchange rates.
Statement 2 is incorrect. The PPP exchange rate may not match the market exchange rate. The market rate is more volatile because it reacts to changes in demand at each location. In addition, tariffs and difference in the price of labor can contribute to longer-term differences between the two rates. One use of PPP is to predict longer-term exchange rates.
PPP has been found more useful for comparing differences in living standards among nations. Earlier, the comparison was based on per capita income, but this was abandoned by most of the international organizations, because it was giving a misleading picture.
Statement 3 is incorrect. India ranks third when GDP is compared in terms of purchasing power parity at $11.33 trillion.
Question 3 of 5
3. Question
1 points
With reference to the National Scheduled Castes Finance and Development Corporation, consider the following statements: 1. It is a fully owned Government of India Company. 2. It provides loans to eligible students belonging to Scheduled Castes for pursuing full time professional and technical courses in India and abroad. Which of the statements given above is/are correct?
Correct
Right Answer: C
Exp:
NSFDC was set up by the Government of India on February 08, 1989, with the name National Scheduled Castes and Scheduled Tribes Finance and Development Corporation (NSCSTFDC). It was incorporated as a fully owned Government of India Company under Section 8 of the Companies Act, 2013 (Previously Section 25 of the Companies Act, 1956).
This is managed by a Board of Directors with representation from Central Government, State Scheduled Castes Development Corporations, Financial Institutions and non-official members representing Scheduled Castes.
The key objective of the National Scheduled Castes Finance and Development Corporation:
Identification of trades & other economic activities of importance to Scheduled Castes population.
Upgradation of skills & processes used by persons belonging to Scheduled Castes.
Promotion of small, cottage & village industries.
Financing of pilot programmes for upliftment and economic welfare of persons belonging to Scheduled Castes.
Improvement in flow of financial assistance to persons belonging to Scheduled Castes for their economic well-being.
Assistance to target group in setting up their projects by way of project preparation, training and financial assistance.
Extending loans to eligible students belonging to Scheduled Castes for pursuing full time professional and technical courses in India and abroad. Hence, statement 2 is correct.
Extending loans to eligible youth to enhance their skill & employability by pursuing vocational education & training courses in India.
Incorrect
Right Answer: C
Exp:
NSFDC was set up by the Government of India on February 08, 1989, with the name National Scheduled Castes and Scheduled Tribes Finance and Development Corporation (NSCSTFDC). It was incorporated as a fully owned Government of India Company under Section 8 of the Companies Act, 2013 (Previously Section 25 of the Companies Act, 1956).
This is managed by a Board of Directors with representation from Central Government, State Scheduled Castes Development Corporations, Financial Institutions and non-official members representing Scheduled Castes.
The key objective of the National Scheduled Castes Finance and Development Corporation:
Identification of trades & other economic activities of importance to Scheduled Castes population.
Upgradation of skills & processes used by persons belonging to Scheduled Castes.
Promotion of small, cottage & village industries.
Financing of pilot programmes for upliftment and economic welfare of persons belonging to Scheduled Castes.
Improvement in flow of financial assistance to persons belonging to Scheduled Castes for their economic well-being.
Assistance to target group in setting up their projects by way of project preparation, training and financial assistance.
Extending loans to eligible students belonging to Scheduled Castes for pursuing full time professional and technical courses in India and abroad. Hence, statement 2 is correct.
Extending loans to eligible youth to enhance their skill & employability by pursuing vocational education & training courses in India.
Question 4 of 5
4. Question
1 points
Structural Unemployment generally means
Correct
Right Answer: D
Exp:
• Structural unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
• Structurally unemployed people usually have skills that are not needed in the market or have a specialized background or experience that cannot be used in the current market. It is usually the result of a change in the economic situation of an industry or region, often a natural disaster or the introduction of a new competitor or market. • Natural disasters, such as hurricanes, have wiped out entire industries in geographic regions leaving the workforce structurally unemployed. It can also occur due to change in technology (from labour intensive technology to capital intensive technology) or change in the pattern of demand. In a developing country like India, structural unemployment exists both in the rural and urban areas.
Incorrect
Right Answer: D
Exp:
• Structural unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
• Structurally unemployed people usually have skills that are not needed in the market or have a specialized background or experience that cannot be used in the current market. It is usually the result of a change in the economic situation of an industry or region, often a natural disaster or the introduction of a new competitor or market. • Natural disasters, such as hurricanes, have wiped out entire industries in geographic regions leaving the workforce structurally unemployed. It can also occur due to change in technology (from labour intensive technology to capital intensive technology) or change in the pattern of demand. In a developing country like India, structural unemployment exists both in the rural and urban areas.
Question 5 of 5
5. Question
1 points
Devaluation of currency would help an economy by 1. Making a trade barrier 2. Making exports competitive 3. Increasing import Which of the statements given above is/are correct?
Correct
Right Answer: B
Exp:
The reduction in the external value of the home currency is called Devaluation.?
For example, changing the exchange rate from Rs.50 = US$1 to Rs.75 = US$1 is called devaluation.
Devaluation is aimed at increasing the export of the country.
It is usually resorted to correct the deficit in the balance of trade or current account balance.
Incorrect
Right Answer: B
Exp:
The reduction in the external value of the home currency is called Devaluation.?
For example, changing the exchange rate from Rs.50 = US$1 to Rs.75 = US$1 is called devaluation.
Devaluation is aimed at increasing the export of the country.
It is usually resorted to correct the deficit in the balance of trade or current account balance.
