UPSC Economics- Money Supply and Indian Financial System

1.

Which one of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years?

enhanced rate of production of all consumer goods streamlined public distribution system pursuing an export oriented strategy containing budgetary deficit and unproductive expenditure

2.

Which one of the following is not a feature of "Value Added Tax"?

It is multi-point destination-based system of taxation. It is a tax levied on value addition at each stage of transaction in the production distribution chain. It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer. It is basically a subject of the central government and the state governments are only a facilitator for its successful implementation.

3.

Which one of the following statements is an appropriate description of deflation?

It is a sudden fall in the value of a currency against other currencies It is a persistent recession in both the financial and real sectors of economy It is a persistent fall in the general price level of goods and services It is a fall in the rate of inflation over a period of time

4.

A rapid increase in the rate of inflation is sometimes attributed to the "base effect". What is "base effect"?

It is the impact of drastic deficiency in supply due to failure of crops It is the impact of the surge in demand due to rapid economic growth It is the impact of the price levels of previous year on the calculation of inflation rate None of the statements [a], [b] and [c]]\ given above is correct in this context

5.

The basic aim of Lead Bank Scheme is that:

big banks should try to open offices in each district there should be stiff competition among the various nationalized banks individual banks should adopt particular districts for intensive development all the banks should make intensive efforts to mobilize deposits

6.

The International Development Association, a lending agency, is administered by the:

International Bank for Reconstruction and Development International Fund for Agricultural Development United Nations Development Programme. United Nations Industrial Development Organization

7.

The acronym SRO, being used in the capital market for various market participants, stands for which one of the following?

Self-Regulatory Organisations Small Revenue Operators Securities Roll-back Operators Securities Regulatory Organisations

8.

Debentures and Equity differ in?

Debentures are bonds confirming that money has been borrowed; equity is a shareholder's voting rights in proportion to his shareholding An equity shareholder cannot withdraw his investment but debenture holder can withdraw his money. Equity shares have greater risk compared to debentures which have fixed interest on the amount paid. Both have the right to vote irrespective of the size of their holdings. Debentures are of lower value than equity

9.

How do we define The terms buil and bear with regard to stock markets?

A bull is an optimistic operator who first buys and then sells shares in expectation of the price going up a bear is a pessimistic market operator who sells the shares in expectation of buying them back at a lower price. There is nothing significantly different as both operate in the capital market. Bull is one who first sells a share and then buys it at a lower price; bear means one who first buys and then sells it in expectation of prices going up. A bull is ready to buy any share; a bear only deals in government securities.

10.

What do you understand by the term "Jobber"?

A stock dealer who deals directly with the public for which he gets a commission A broker who buys and sells on behalf of his clients A stock dealer who is a member of a stock exchange and deals with the public only through the medium of brokers A stock broker who deals only with shares and not any other form of securities

UPSC Economics- Money Supply and Indian Financial System

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UPSC Economics- Money Supply and Indian Financial System

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