61. Purchasing Power Parity theory is related with
| Answer : Option D |
| Explanation : |
| Purchasing power parity (PPP) is an economic theory and a technique used to determine the relative value of currencies, estimating the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to (or on par with) each currency's purchasing power. It asks how much money would be needed to purchase the same goods and services in two countries, and uses that to calculate an implicit foreign exchange rate. Using that PPP rate, an amount of money thus has the same purchasing power in different countries. |
62. Redistribution of income in a country can be brought about through
| Answer : Option A |
| Explanation : |
| Redistribution of income and redistribution of wealth are respectively the transfer of income and of wealth (including physical property) from some individuals to others by means of taxation, monetary policies, etc. This can be achieved with a combination or progressive taxation and progressive expenditure. Progressive tax is one such means since they are imposed in an attempt to reduce the tax incidence of people with a lower ability to pay, as such taxes shift the incidence increasingly to those with a higher ability- to-pay. Regarding the distributive impact of public expenditure, the principle of maximum social advantage should be the underlying criteria of public spending. Hence, progressive public expenditure is the best antidote to reduce income inequality existing in the society. The expenditure on social security like free medical aid, free education, subsidized houses etc. is progressive in nature. For example, if only the lower salaried employees were given free residential quarters, it is a case of progressive expenditure. Such expenditure helps to reduce the glaring inequality existing in the distribution of income. Progressive redistributive expenditure may also take the shape of provision of cheap or free services and commodities. Free primary education, free medical aid, subsidies to food and housing and the provision of free meals to school children are examples of this type of progressive grant. Such expenditure benefits the poorer among the poorest and helps to raise the living standards of the weaker sections. |
63. While computing national income estimates, which of the following is required to be observed ?
| Answer : Option D |
| Explanation : |
| National income is also computed by the expenditure approach wherein the focus is on finding the total output of a nation by finding the total amount of money spent. As per this approach, GDP= C+I+G+ (X-M) where, C = household consumption expenditures / personal consumption expenditures; I = gross private domestic investment; G = government consumption and gross investment expenditures; X = gross exports of goods and services; and M = gross imports of goods and services. (X – M) is often written as XN, which stands for 'net exports'. |
64. Tick the correct option with regards to the contribution towards GDP (Gross Domestic Product) from Agriculture
| Answer : Option A |
| Explanation : |
| Agriculture contributed more than 50 per cent of India's GDP in 1950-51. Contribution of agriculture and allied sectors to India's GDP has been declining since then. Agriculture's contribution fell down to 14.5 per cent in 2010-11 and to 14.1 per cent in 2011-12. |
65. Who amongst the following has never been the Governor of Reserve Bank of India ?
| Answer : Option A |
| Explanation : |
| D Subbarao (05.09.2008– Till date) C Rangarajan (22.12.1992 – 22.11.1997) Y.V. Reddy (05.09.2003 – 04.09.2008) |
66. The basic regulatory autho-rity for mutual funds and stock markets lies with the
| Answer : Option B |
| Explanation : |
| The Securities and Exchange Board of India (frequently abbreviated SEBI) is the regulator for the securities market in India. SEBI has to be responsive to the needs of three groups, which constitute the market: the issuers of securities; the investors; and the market intermediaries. It is entrusted with regulating the business in stock exchanges and any other securities markets; registering and regulating the working of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustees of trust deeds, registrars to an issue, merchant bankers, underwriters, portfolio managers, investment advisers and such other intermediaries who may be associated with securities markets in any manner; registering and regulating the working of (venture capital funds and collective investment schemes), including mutual funds; etc. |
67. The headquarters of RBI is in
| Answer : Option B |
| Explanation : |
| The headquarters of Reserve Bank of India (RBI) is located at Mumbai, Maharashtra. Initially, the headquarter of RBI was in Calcutta (Now Kolkata) but in 1937 it was permanently moved to Bombay (now Mumbai).The RBI commenced its operations on 1 April, 1935 during the British Rule in accordance with the provisions of the Reserve Bank of India Act, 1934. |
68. What is the main function of Central Statistical Organisation (CSO) ?
| Answer : Option B |
| Explanation : |
| The Central Statistics Organization, established in 1951, is responsible for coordination of statistical activities in the country, and evolving and maintaining statistical standards. Its activities include National Income Accounting; conduct of Annual Survey of Industries, Economic Censuses and its follow up surveys, compilation of Index of Industrial Production, as well as Consumer Price Indices for Urban Non- Manual Employees, Human Development Statistics, Gender Statistics, imparting training in Official Statistics, Five Year Plan work relating to Development of Statistics in the States and Union Territories; dissemination of statistical information, work relating to trade, energy, construction, and environment statistics, revision of National Industrial Classification, etc. |
69. Lender of the Last Resort is :
| Answer : Option C |
| Explanation : |
| The Reserve Bank of India (RBI) is known as the Lender of Last Resort. This is because when a commercial bank faces financial crisis and fails to obtain funds from other sources, then the central bank provides them with the financial assistance in the form of credit. This role of the central bank saves the commercial bank from bankruptcy. Thus, the RBI plays the role of guarantor for the commercial banks and maintains a sound banking system in the economy. |
70. Which of the following functions as a controller of credit in India ?
| Answer : Option D |
| Explanation : |
| Credit Control is an important tool used by Reserve Bank of India, a major weapon of the monetary policy used to control the demand and supply of money (liquidity) in the economy. Central Bank administers control over the credit that the commercial banks grant. Such a method is used by RBI to bring 'Economic Development with Stability'. It means that banks will not only control inflationary trends in the economy but also boost economic growth which would ultimately lead to increase in real national income with stability. |
71. If two commodities are complements, then their cross-price elasticity is
| Answer : Option C |
| Explanation : |
| In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of another good. It is measured as the percentage change indemand for the first good that occurs in response to a percentage change in price of the second good. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products. |
72. Which of the following Government of India programmes aims to help, build or upgrade dwelling units of below the poverty line rural families ?
| Answer : Option D |
| Explanation : |
| India Awas Yojana is a Government of India social welfare programme to provide housing for the rural poor in India. Started in 1985 as part of the Rural Landless Employment Guarantee Programme (RLEGP), Indira Awas Yojana was subsumed in Jawahar Rozgar Yojana in 1989 and has been operating as an independent scheme since 1996. |
73. Maruti cars are mainly based on
| Answer : Option C |
| Explanation : |
| Maruti Udyog Ltd. came into being in the year 1982 when Suzuki Motor Corporation (SMC) entered into a joint venture with Government of India to manufacture fuel-efficient passenger cars under the brand name Maruti. Maruti cars, based on Japanese philosophy for super-efficient manufacturing, brought about the renaissance of the Indian components industry. |
74. The Commission in India dealing with minimum support price, procurement price, etc in connection with agricultural goods is the
| Answer : Option B |
| Explanation : |
| The Commission for Agricultural Costs and Prices (CACP), the government's nodal agency to recommend the minimum price for farm commodities. The Agricultural Prices Commission was set up in January, 1965 to advise the Government on price policy of major agricultural commodities with a view to evolving a balance and integrated price structure in the perspective of the overall needs of the economy and with due regard to the interests of the producer and the consumer. Since March 1985, the Commission has been known as Commission for Agricultural Costs and Prices |
75. Which of the following sectors contributed more to the savings in India?
| Answer : Option C |
| Explanation : |
| Household savings contribute 60-80% of India's gross domestic savings, and have been its most stable and highest component for over six decades. A tenth of total assets is in currency; a similar amount goes to the government through small savings schemes. Since there is no social security in India, life insurance and provident funds tend to be allocated significantamounts from total household savings. Finally, capital market instrumentssuch as shares, debentures, mutual funds get less than 5% of total investment. |
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