Quiz 590: GK of Indian Economy for Civil Services & RBI Management Grade Exams

1. In context with Banking in India, what is the difference between liquidity adjustment facility-repo rate and marginal standing facility rate ?
1. Under Repo rate banks can borrow above SLR Requirements, under MSF, Banks can borrow within SLR requirements
2. Under Repo, banks can borrow up to 5% of net demand and time liabilities, under MSF, they can borrow up to no limit
Choose the correct option:
[A]Only 1 is correct
[B]Only 2 is correct
[C]Both 1 & 2 are correct
[D]Neither 1 nor 2 is correct


Explanation
2. Which among the following in India can use "Repo Bonds" to raise short term money from markets?
1. Commercial Banks
2. Corporate
3. Governments
Choose the correct option:
[A]Only 1
[B]1 & 2
[C]1, 2 & 3
[D]Only 1 & 3


Explanation
3. A company making a public issue of securities has to file a Draft Red Herring Prospectus with SEBI through an eligible merchant banker prior to filing a prospectus with the Registrar of Companies. What information does this Draft Red Herring Prospectus provide?
1. Financial Details about the company
2. Objects of raising money
3. Price and size of offerings
Choose the correct option:
[A]1 & 2
[B]2 & 3
[C]1, 2 & 3
[D]Only 1


Explanation
4. Consider the following statements:
1. Government of India has set up a Price Monitoring Cell (PMC) in the Department of Agriculture to monitor and analyze price data and trends of availability of essential commodities.
2. Price Monitoring Cell (PMC) monitors 21 essential Commodities
Which among the above statements is/ are correct?
[A]Only 1 is correct
[B]Only 2 is correct
[C]Both 1 & 2 are correct
[D]Both 1 & 2 are incorrect


Explanation
5. One of the economic laws says that as incomes increase, the proportion of starchy staples in the food basket declines relative to the share of more expensive sources of calories. Recent NSSO data showing a significant increase in the share of protein-rich items in total food expenditure, both in rural and urban areas of India do confirm this hypothesis. What this hypothesis is known as ?
[A]Engel's Law
[B]Bennet’s Law
[C]Campbell's law
[D]Gresham's law


Explanation
6. Consider the following statements about the Infrastructure Debt Fund (IDF) in India:
1. Infrastructure Debt Fund can be established as a trust in India, but not as a company
2. Infrastructure Debt Fund are regulated by SEBI
Which among the above statements is/ are correct?
[A]Only 1 is correct
[B]Only 2 is correct
[C]Both 1 & 2 are correct
[D]Both 1 & 2 are incorrect


Explanation
7. In one of the seminars, the Governor of RBI said that the schemes like Mahatma Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) have played role in increasing inflation. How MGNREGA could have stirred up inflationary pressures?
1. By increasing real wage rates
2. By increasing production
3. By increasing demand
Choose the correct opton:
[A]Only 1
[B]1 & 2
[C]1 & 3
[D]1, 2 & 3


Explanation
8. In context with India's Oil and Gas fields consider the following:
1. Only Oil Fields
2. Only Gas Fields
3. Both Oil and Gas Fields
Which among the following options gives the correct decreasing order of numbers of the fields classified as above?
[A]3, 2, 1
[B]1, 2, 3
[C]2, 1, 3,
[D]3, 1, 2


Explanation
9. It has been generally viewed that when an economy grows beyond its potential growth rate, it causes inflation. How does growing faster than the potential rate cause inflation?
[A]Fast growth causes quick resource utilization to fulfill the higher demand
[B]Fast growth causes more employment opportunities which leads to rise in prices
[C]Fast growth causes more productivity which leads to higher supply and cost push inflation
[D]All of above mentioned reasons


Explanation
10. Consider the following statements in context with India's planning experience:
1. A planning in the sense of formal projections on the basis of the certain sets of assumptions started only in the Second Fiver Year Plan in India
2. The Theoretical assumptions in the second Fiver year plan were provided by Mahalanobis Model of growth
3. The Mahalanobis Model of growth incorporates the possibilities opened up by the Foreign Trade
Which among the above statements is / are correct ?
[A]Only 1 is correct
[B]Only 1 & 2 are correct
[C]Only 2 & 3 are correct
[D]All are correct


Explanation