Indian Economy Test -21-Indian Economy-Quiz

Prelims 2020 Test Series-Indian Economy Test -21

Q 1.
Disruptive Entrepreneur Elon Musk attended a Pro Kabaddy Match during his visit to India. He also purchased a Kabaddi Kit from the organizers. In his return, he travelled by Air India. The amount he paid for the Kit purchase and air travel would be classified in India’s balance of payment account as:

a.)
a) Goods exports and service exports to India respectively
b.)
b) Goods exports and service imports for India respectively
c.)
c) Service imports in both cases
d.)
d) Service exports from India in both cases

Q 2.
‘Gold Tranche’ or reserve tranche refers to:

a.)
(a) A loan option from the IMF with less conditions.
b.)
(b) Loans from the IMF having strict conditionalities.
c.)
(c) Voting in the IMF when a new Board of Directors has to be elected.
d.)
(d) A credit system granted by World Bank to its members.

Q 3.
Presently, India’s exchange rate policy towards current account and capital account transactions is that the rupee is:

a.)
a) Fully convertible for current account transactions, but not for capital account transactions.
b.)
b) Fully convertible for capital account transactions, but not for current account transactions.
c.)
c) Fully convertible for both capital and current account transactions.
d.)
d) Not convertible for either type of transactions.

Q 4.
Mr. Ramprakash travelled to England for medical treatment. He had to bear the cost of his air travel by Air India as well as the cost of hospitalization in England. In this context, which one of the following is true in terms of entry in India’s balance payments transactions?

a.)
a) The cost of hospitalisation is included in service imports but the cost of air travel is not.
b.)
b) The cost of air travel is included in service imports but the cost of hospitalisation is not.
c.)
c) Both expenditures are included in the category of service imports.
d.)
d) Both expenditures are included in service exports.

Q 5.
Which of the following does not form a part of the foreign exchange reserves of India?

a.)
a.) Foreign currency holding with the banking system
b.)
b.) SDRs
c.)
c.) Foreign currency assets
d.)
d.) Gold holdings with the RBI

Q 6.
Consider the following statements about official gold holdings.

1. The US is the largest official holder

2. India is the Eleventh largest official gold holder.

Which of these statements is/are correct?

a.)
a) Only 1 is correct
b.)
b) Neither 1 nor 2 is correct
c.)
c) Both are correct
d.)
d) Only 2 is correct

Q 7.
Consider the following policy domains with regard to economic policy.

1. Intellectual Property Rights

2. Start-up Policy

3. Foreign Direct Investment

Which Department is the nodal agency regarding these policies?

a.)
(a) Department of Economic Affairs
b.)
(b) Department of Investment and Public Asset Management
c.)
(c) Department of Science and Technology
d.)
(d) Department for Promotion of Industry and Internal Trade

Q 8.
The head quarter of the Asian Development Bank is at:

a.)
a.) Tokyo
b.)
b.) Singapore
c.)
c.) Beijing
d.)
d.) Manila

Q 9.
Match List I (Types of Investment) with List II (nature of Investment) and select the correct answer using the code given below the Lists:

List   I                                    List   II

     (Types of investment)                     (Nature of Investment)

          A. Direct foreign                        1. Purchase of the countries

         Investment                       stocks, bonds and currencies by foreigners.

          B. Foreign portfolio                    2. Investments in productive

             Investment                                     assets of the country by foreigners

         C. Commercial Borrowings          3. Raising loans from foreign financial

                                                                     Institutions.

         D. Foreign Institutional                4. Provision of financial assistance by a

            Assistance.                                         Foreign government/institution

Code:

a.)
a.) A -4 B -1 C -3 D-
b.)
b.) A -2 B -3 C -1 D-4
c.)
c.) A-2 B -1 C-3 D-4
d.)
d.) A -4 B-3 C -1 D-2

Q 10.
If the Rupee undergoes steep depreciation against the US Dollar and other leading currencies, which of the following effects may occur for the domestic economy? Select the correct answer using the codes given below.

1. Indian commodities become cheaper in the international market.

2. Domestic corporates’ external debt burden in Rupee terms goes up.

3. The inflation risk from the trade channel increases.

Codes:

a.)
a.) 1 and 3 correct
b.)
b.) Only 1 is correct
c.)
c.) 1, 2 and 3 correct
d.)
d.) Only 2 is correct

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