Daily Updates Mock Test 58

Gross National Product (GNP) is the correct answer because it represents the total value of goods and services produced by the residents of a country, both domestically and abroad, in a given year. It includes income earned by domestic residents from their investments and employment overseas. GNP is an important measure of a country's economic performance and is used to compare the economic output of different countries.

The correct answer is "No of death of maternal mother per one lakhs population." This is because the mother mortality rate is a measure of the number of deaths of maternal mothers per one lakh (100,000) population. It is used to assess the risk of death during pregnancy, childbirth, or within 42 days after childbirth. By expressing the rate per one lakh population, it allows for better comparison and understanding of the magnitude of the issue across different regions or countries.

The Balance of Payment (BOP) of a country is calculated by taking into account the Current Account, which includes the balance of trade, net income from abroad, and net current transfers. Changes in the Foreign Exchange Reserves are also considered, as they reflect the inflow or outflow of foreign currency. Errors and Omissions, which account for unrecorded transactions or statistical discrepancies, are also included in the calculation. Therefore, all of the factors mentioned in the options are taken into account when calculating the BOP of a country.

The proposed currency of the Gulf Cooperation Council (GCC) is Khaleeji.

Money stock refers to the total amount of money available in an economy at a specific time. It includes both physical currency (coins and banknotes) and demand deposits (money held in checking accounts). Money stock is an important indicator of the overall liquidity and financial health of an economy. It is used to measure the size and growth of the money supply, which in turn influences inflation, interest rates, and economic activity.

A monopoly is a market structure where there is only one firm that dominates the entire market and has complete control over the price of its product. This means that the firm can set the price at any level it desires, without any competition to drive prices down. As there are no close substitutes available in the market, consumers have no choice but to accept the price set by the monopolistic firm. Therefore, in a monopoly, the degree of control over the price of its product by a firm is very large.

The correct answer is "Demand Curve". The average revenue curve represents the average revenue earned by a firm per unit of output sold. It is derived by dividing total revenue by the quantity of output sold. Since average revenue is equal to the price of the product in perfect competition, the average revenue curve is also referred to as the demand curve. This is because in perfect competition, the firm is a price taker and has no control over the price, therefore the average revenue curve represents the demand for the firm's product.

Disguised unemployment in India exists in the agricultural sector. This means that there are more workers employed in agriculture than required for efficient production. It occurs when the productivity of additional workers is close to zero, indicating that some of the workers in the sector are not fully utilized. Disguised unemployment in the agricultural sector is often a result of limited job opportunities in other sectors, lack of alternative employment options, and the prevalence of small-scale farming practices.

The correct answer is 1960-61. The Intensive Agriculture District Programme (IADP) was initiated in 1960-61. This program aimed to increase agricultural productivity in specific districts by providing them with improved infrastructure, modern farming techniques, and better access to credit and inputs. By focusing on selected districts, the program aimed to achieve concentrated development and serve as a model for replication in other areas.

The given answer suggests that the XYZ Co. is not a price taker in the market because it must lower the price to sell additional units of output. This conclusion can be drawn because the demand curve for the ABC Co. slopes downward and to the right, indicating that as the XYZ Co. increases the quantity of output it wants to sell, it must lower the price to attract more buyers. In a perfectly competitive market, firms are price takers and can sell all that they want at the established market price, which is not the case here. Moreover, the answer does not mention anything about the firm's ability to maximize profits or the stability of price and revenue.

The given market shares indicate that there are a few dominant firms in the industry, with Adidas having the highest market share at 18.7%. This suggests that the industry is characterized by an oligopoly, which is a market structure where a small number of large firms dominate the market. In an oligopoly, firms have significant market power and there may be barriers to entry for new firms. The market shares of the other firms, such as Puma, Rebook, and Nike, further support the oligopolistic nature of the industry. The presence of "Others" category with a significant market share also indicates that there may be some smaller firms in the industry, but the dominance of a few large firms suggests an oligopoly.

The service sector is considered the backbone of the Indian economy because it contributes the most to the country's GDP and employment. It includes various industries such as banking, IT, telecommunications, healthcare, and hospitality. The service sector has experienced significant growth in recent years and has become a major driver of economic development. It not only generates revenue but also plays a crucial role in attracting foreign investment and promoting exports. Additionally, the service sector has a multiplier effect on other sectors, leading to overall economic growth and development.

The given correct answer states that the response to a price increase is less than the response to a price decrease. This implies that when the price of a product increases, the demand for that product decreases, but not as significantly as when the price decreases. This suggests that consumers are more sensitive to price decreases and are more likely to respond by purchasing more of the product, while they are less likely to respond to price increases by reducing their purchases.

NPA stands for Non Performing Assets. In the banking environment, NPA refers to loans or advances that have stopped generating income for the bank. These assets are considered non-performing when the borrower fails to make interest or principal payments for a specified period of time. Non Performing Assets are a cause of concern for banks as they impact their profitability and financial stability.

The firm encounters its "shutdown point" when the average variable cost equals the price at the profit-maximizing level of output. This means that the firm is no longer able to cover its variable costs with the revenue it generates from selling its products. At this point, the firm would choose to shut down operations rather than continue operating at a loss.

If the market price is less than average total cost but greater than average variable cost, the firm is experiencing losses in the short run. However, shutting down would result in even greater losses as the firm would still have to pay its fixed costs. Therefore, the best option for the firm is to continue operating in the short run to minimize its losses. By doing so, the firm can cover its variable costs and contribute towards its fixed costs, reducing the overall loss.

The rate of GDP growth is definitely a major indication of the state of the economy of a country. GDP (Gross Domestic Product) measures the total value of all goods and services produced within a country's borders in a specific time period. A high rate of GDP growth indicates a strong and expanding economy, while a low or negative rate suggests economic contraction or stagnation. Therefore, monitoring the rate of GDP growth is crucial in assessing the overall health and performance of a country's economy.

When the price is less than the average variable cost at the profit-maximizing level of output, it means that the firm is not able to cover its variable costs. In this situation, the firm should shut down because continuing to operate would result in losses. By shutting down, the firm avoids further losses and minimizes its financial damage.

The 'Bombay plan' was launched by some industrialists in the year 1944.

The correct answer is J.L. Nehru. The Economic Planning Committee was established under the chairmanship of J.L. Nehru. This committee was formed in 1938 and was responsible for formulating and implementing economic plans for the development of India. Nehru, as the first Prime Minister of India, played a crucial role in shaping the country's economic policies and was actively involved in the planning process.

The income tax in India is direct because it is levied on the income of individuals and entities directly, rather than being imposed on goods or services. It is also progressive because the tax rate increases as the income level increases. This means that individuals with higher incomes are subject to higher tax rates, while those with lower incomes are taxed at lower rates. This progressive tax system aims to redistribute wealth and promote social equality by ensuring that those who earn more contribute a larger proportion of their income towards taxes.

Balwant Rai Mehta is the correct answer because he was a prominent Indian politician who played a crucial role in the decentralization of power in India. He chaired the Balwant Rai Mehta Committee, which recommended the establishment of a three-tier Panchayati Raj system in India. This system aimed to decentralize power and empower local self-governance at the village, block, and district levels. The recommendations of the Balwant Rai Mehta Committee were instrumental in the implementation of Panchayati Raj institutions across the country, making Balwant Rai Mehta the correct answer.

Sales tax is a principal source of revenue for the State Government in India. This is because sales tax is levied on the sale of goods within a state and is collected by the state government. It is a consumption-based tax and is imposed on the final consumer. The revenue generated from sales tax is used by the state government to fund various developmental activities, infrastructure projects, and public services. Income tax, state excise duties, and land revenue also contribute to the state government's revenue, but sales tax is considered one of the main sources.

Open market operations of a Central Bank refer to the buying and selling of government securities in the open market. These operations are used to control the money supply and interest rates in the economy. By purchasing government securities, the Central Bank injects money into the economy, increasing the money supply and lowering interest rates. Conversely, by selling government securities, the Central Bank reduces the money supply and increases interest rates. Therefore, the correct answer is government securities.

The RBI, or Reserve Bank of India, performs various functions such as being the Bankers Bank, Bank of Issue, and Custodian of foreign exchange. However, being Bankers to the Public is not a function of the RBI. This means that the RBI does not directly act as a bank for the general public, but rather focuses on regulating and supervising the banking system in India.

Disguised unemployment refers to a situation where there are more people employed in a job or sector than is actually necessary for the work being done. This means that the marginal productivity of labor is zero, as additional workers do not contribute to any increase in output. It does not necessarily mean that a large number of people remain unemployed or that alternative employment is not available. It also does not imply that the productivity of workers is low, as the existing workers may be highly productive. Therefore, the correct option is 3 only.

The International Monetary Fund (IMF) is not a part of the World Bank. While both the World Bank and the IMF were established at the Bretton Woods Conference in 1944, they serve different purposes. The World Bank focuses on providing financial and technical assistance to developing countries, while the IMF aims to promote global monetary cooperation and provide financial stability by monitoring the international monetary system and providing loans to countries experiencing balance of payments problems. Therefore, the IMF is not a part of the World Bank.

The headquarters of the World Bank is located in Washington D.C. This is the correct answer because the World Bank is an international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects. Washington D.C. is the capital city of the United States and is home to many international organizations, including the World Bank.

'Udyog Bandhu' is an organization that assists industrial units in solving time-bound establishment and related problems. This means that it provides support and guidance to industrial units in resolving any issues or challenges they may face during the process of setting up their businesses within a specified timeframe. The organization aims to facilitate the smooth establishment of industrial units and ensure that any obstacles or delays are addressed promptly and effectively.

The correct answer is allocating scarce resources in such a manner that society’s unlimited needs or wants are satisfied in the best possible manner. This answer best captures the central problem in economics, which is the allocation of scarce resources to fulfill society's unlimited needs and wants. Economics is concerned with how to efficiently distribute resources to maximize societal welfare and satisfaction.

The correct answer is "Substantial changes in industrial licensing policy". Economic liberalization in India began with the implementation of substantial changes in the industrial licensing policy. Prior to liberalization, the Indian government had a strict control over industries and required them to obtain licenses for various activities. However, in the 1980s and 1990s, the government initiated reforms to reduce the bureaucratic hurdles and restrictions on industrial licensing. This allowed for greater participation of private players and foreign investment in the Indian economy, leading to increased competition and economic growth.

The quaternary sector refers to activities that involve research and development. This sector focuses on the creation and application of knowledge, innovation, and technology. It includes activities such as scientific research, technological advancements, software development, and consulting services. These activities are crucial for the growth and advancement of industries and economies, as they contribute to the development of new products, processes, and services.

The correct answer is "I and III". This means that statement I, which states that the government is disinvesting its share in various public sector undertakings, is true. Additionally, statement III, which states that the process of disinvestment is very slow and the government always falls short of its target, is also true.

When an economy achieves "productive efficiency," it means that goods and services are produced at the least cost possible and no resources are wasted. This implies that the economy is operating at its maximum potential, utilizing all available resources efficiently and effectively. By minimizing costs and avoiding any wastage of resources, the economy can produce the maximum output of goods and services. This ensures that resources are allocated optimally and the economy is functioning at its highest level of productivity.

In a linear PPF, the opportunity cost of producing one good in terms of the other remains constant. This means that as the production of a good increases, the opportunity cost of that good remains the same. This is because resources are perfectly substitutable between the two goods, and the trade-off between them remains constant. Therefore, the correct statement is that opportunity costs are constant.

The correct answer is 2 only. Gilt-edged market refers to the market of government securities. This term is used to describe a market where high-quality, low-risk government bonds are traded. These bonds are considered to be very secure investments and are often used as a benchmark for other types of investments. The term "gilt-edged" comes from the historical practice of using gold leaf to edge the paper certificates of these bonds, symbolizing their high quality and reliability.

The correct answer is "Only 1". This is because statement 1 accurately describes the concept of "hidden price rise", which refers to a situation where the quality or quantity of a product is reduced while the price remains the same. Statement 2 does not accurately describe hidden price rise, as it refers to an increase in indirect taxes on goods compromising the quality of the goods offered for sale, which is not the same as a reduction in quality or amount of a product offered at an unchanged price.

Periods of less than full employment correspond to points inside the PPF. This is because when an economy is not operating at full employment, it is not utilizing all of its available resources efficiently. As a result, the economy is producing below its maximum potential, which is represented by points inside the PPF. Points outside the PPF would indicate an unattainable level of production given the available resources, while points on the PPF would represent full employment and efficient resource allocation.

In a mixed economy, economic decisions are partly taken by the state and partly by private entrepreneurs. This means that the government has some control over the economy and can make decisions that affect businesses and industries, such as regulations and taxes. At the same time, private entrepreneurs have the freedom to make their own economic decisions, such as what goods and services to produce and how to allocate resources. This combination of state and private control allows for a balance between government intervention and market forces in the economy.

Deficit financing refers to a situation where a government spends more money than it receives in revenue, resulting in a budget deficit. This can lead to inflation because the increased government expenditure stimulates demand in the economy. However, if government expenditure leads to an increase in the aggregate supply in proportion to the aggregate demand, it can help prevent inflation. Similarly, if only aggregate demand is increased without a corresponding increase in aggregate supply, it can lead to inflation. Lastly, if all the expenditure is used for national debt payment, it can also help check inflation as it reduces the money supply in the economy. Therefore, all of the above options can help mitigate the inflationary effects of deficit financing.

Smart money refers to credit cards because credit cards offer various features and benefits that make them a convenient and efficient form of payment. Credit cards allow users to make purchases without carrying cash, earn rewards and cashback on their spending, and provide protection against fraud and unauthorized transactions. Additionally, credit cards offer flexibility in terms of repayment options and can help build a good credit history if used responsibly. Therefore, credit cards are considered as a smart choice for managing finances and making secure transactions.

RTGS stands for Real Time Gross Settlements. This system is used for transferring funds between banks in real-time. It allows for immediate and irrevocable transfer of funds from one bank to another. The term "gross" refers to the fact that each transaction is settled individually, without any netting or offsetting against other transactions. This ensures that funds are settled on a one-to-one basis, without any delay or batching. Therefore, the correct answer is Real Time Gross Settlements.

Hawala transactions are illegal money transfer systems that operate outside of traditional banking channels. In India, these transactions are prohibited under the Foreign Exchange Management Act (FEMA). FEMA regulates foreign exchange transactions and aims to prevent money laundering and illegal activities related to foreign exchange. It provides guidelines for the orderly development and maintenance of foreign exchange markets in India. By prohibiting Hawala transactions, FEMA helps to ensure transparency and accountability in financial transactions and prevents the misuse of foreign exchange for illegal purposes.

The difference between visible exports and visible imports is known as the balance of trade. It represents the monetary value of a country's exports minus its imports. A positive balance of trade indicates that a country is exporting more than it is importing, which is favorable for its economy. Conversely, a negative balance of trade suggests that a country is importing more than it is exporting, resulting in a trade deficit. The balance of trade is an important indicator of a country's economic performance and trade competitiveness.

The correct answer is 1945. The World Bank was formed in 1945 with the aim of providing financial and technical assistance to developing countries for development projects. It was established as part of the Bretton Woods Conference, which took place in 1944 and aimed to create a post-war international monetary system. The World Bank has since played a crucial role in promoting economic development and reducing poverty in many countries around the world.

The PMJDY scheme of the government has been recognized by the Guinness Book of World Records for opening the most bank accounts in a single week. This achievement highlights the success and effectiveness of the scheme in bringing financial inclusion to a large number of people within a short span of time. The scheme aimed to provide banking services to the unbanked population of India and promote financial literacy. By opening a record number of bank accounts in just one week, the PMJDY scheme has made significant progress in achieving its objectives.

In the second phase of nationalization in 1980, a total of 6 banks were nationalized.

The correct answer is "Mera Khata Bhagya Vidhata." This slogan is associated with the Pradhan Mantri Jan Dhan Yojana (PMJDY), a financial inclusion program launched by the Government of India. The slogan translates to "My Account, Fate's Creator" in English, emphasizing the program's aim to provide financial security and empowerment to all individuals. It highlights the idea that opening a bank account can bring positive changes and opportunities in people's lives.

The correct answer is "Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest." This is the full form of the SARFAESI Act. The act was enacted in 2002 by the Indian Parliament to provide a legal framework for the securitization and reconstruction of financial assets and the enforcement of security interest by banks and financial institutions. It allows banks to take possession of collateral assets and sell them without the intervention of the court, in order to recover their dues from defaulting borrowers.

Banks and other financial institutions in India are required to maintain a certain amount of liquid assets as a reserve all the time in RBI. This is known as the Cash Reserve Ratio (CRR). The CRR is a monetary policy tool used by the Reserve Bank of India (RBI) to control inflation and stabilize the economy. It ensures that banks have enough funds to meet the withdrawal demands of their customers and helps in maintaining the stability of the banking system.