1) The price of any currency in international market is decided by the
1. World Bank
2. Demand for goods/services provided by the country concerned
3. Stability of the government of the concerned country
4. Economic potential of the country in question
Select the correct answer using the codes given below.
a) 2 and 3 only
b) 3 and 4 only
c) 1 and 4 only
d) 1, 2, 3 and 4
2) Which of the following measures would result in an increase in the money supply in the economy?
1.Purchase of government securities from the public by the Central Bank
2.Deposit of currency in commercial banks by the public
3.Borrowing by the government from the Central Bank
4.Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below :
A)1 only B)2 and 4 only c)1 and 3 D)2, 3 and 4
3) Which of the following would include Foreign Direct Investment in India?
1. Subsidiaries of foreign companies in India
2. Majority foreign equity holding in Indian companies
3. Companies exclusively financed by foreign companies
4. Portfolio investment
Select the correct answer using the codes given below:
[A]1,2, 3 & 4
[B]2 & 4 Only
[C]1 & 3 Only
[D]1,2 & 3 Only
4) Economic growth is normally coupled with?
[A] Inflation [B] Hyper Inflation [C] Deflation [D] Stagflation.
5) In the parlance of financial investments, the term 'bear' denotes
A) an investor who feels that the price of a particular security is going to fall.
B) an investors who expects the price of a particular shares to rise.
C) a shareholder on a bondholder who has an interest in a company , financial or otherwise.
D) Any lender whether by making a loan or buying a bond.
6) which of these are included in broad money (M3) in India
A) Market borrowings
B) Treasury bills
C) special securities to RBI
1) ABC 2) A C 3) B C 4) A B
7) In which year, Indian Rupee was devalued for the first time?
[A]1965 [B]1966 [C]1968 [D]1971
8) The question of full capital account convertibility of Indian Money (Rupee) was examined by the committee knows as
A)Vaghul Vommittee
B)Rangrajan Committee
C) Tarapore Committee II
D) Hashim Committee
9) An economy is at the take off stage on its path to development when it
1. World Bank
2. Demand for goods/services provided by the country concerned
3. Stability of the government of the concerned country
4. Economic potential of the country in question
Select the correct answer using the codes given below.
a) 2 and 3 only
b) 3 and 4 only
c) 1 and 4 only
d) 1, 2, 3 and 4
2) Which of the following measures would result in an increase in the money supply in the economy?
1.Purchase of government securities from the public by the Central Bank
2.Deposit of currency in commercial banks by the public
3.Borrowing by the government from the Central Bank
4.Sale of government securities to the public by the Central Bank
Select the correct answer using the codes given below :
A)1 only B)2 and 4 only c)1 and 3 D)2, 3 and 4
3) Which of the following would include Foreign Direct Investment in India?
1. Subsidiaries of foreign companies in India
2. Majority foreign equity holding in Indian companies
3. Companies exclusively financed by foreign companies
4. Portfolio investment
Select the correct answer using the codes given below:
[A]1,2, 3 & 4
[B]2 & 4 Only
[C]1 & 3 Only
[D]1,2 & 3 Only
4) Economic growth is normally coupled with?
[A] Inflation [B] Hyper Inflation [C] Deflation [D] Stagflation.
5) In the parlance of financial investments, the term 'bear' denotes
A) an investor who feels that the price of a particular security is going to fall.
B) an investors who expects the price of a particular shares to rise.
C) a shareholder on a bondholder who has an interest in a company , financial or otherwise.
D) Any lender whether by making a loan or buying a bond.
6) which of these are included in broad money (M3) in India
A) Market borrowings
B) Treasury bills
C) special securities to RBI
1) ABC 2) A C 3) B C 4) A B
7) In which year, Indian Rupee was devalued for the first time?
[A]1965 [B]1966 [C]1968 [D]1971
8) The question of full capital account convertibility of Indian Money (Rupee) was examined by the committee knows as
A)Vaghul Vommittee
B)Rangrajan Committee
C) Tarapore Committee II
D) Hashim Committee
9) An economy is at the take off stage on its path to development when it
a) becomes stagnant
b) begins steady growth
c) is liberalized
d) gets maximum foreign aid
b) begins steady growth
c) is liberalized
d) gets maximum foreign aid
10) Which of the following plans aimed at improving the standard of living?
a) Third Plan
b) Fourth Plan
c) Fifth Plan
d) Sixth Plan
b) Fourth Plan
c) Fifth Plan
d) Sixth Plan
Answers :-
1) a
Explanation– The World Bank is a vital source of financial and
technical assistance to developing countries around the world. It has no relation with price of currency in international
market. So we can eliminate option c and option d.
Price of any currency is determind like price of any other commodity i.e, by forces of demand and supply. Demand for a
currency is created by two factors, its exports that is other countrieswho want to buy, or the investments that people want to make in that currency. Therfore, Option 2 is correct.
Stability of the government is very important factor too as an unstable govt may not be able to take effective economic decisions which will in turn affect export and import.
2) 1 & 3 Please note that any money that flows out of RBI leads to increase in the money supply. When the RBI purchases government securities from Public the money flows out of RBI, this will increase the money supply. So statement 1 is correct. When currency is deposited by public in commercial banks, its mere transfer of money from public to commercial banks. the net effect on the money supply is nil.So statement 2 is incorrect. When the Government borrows from RBI, the money again flows out of RBI. To fulfil the demand of the Government, RBI will print new money and this leads to increase in the the money supply thus statement 3 is also correct.
3) 1,2 & 3 Only
Direct Investments and Portfolio investment are basic terms. Suppose I have Rs. 100 with me. I need to invest it somewhere. If, I buy a land in Rs. 70, build a factory in Rs.
15, get human resources in Rs. 10 and keep Rs. 5 for my operations, it will be my Direct Investment. If I invest it in a company in which by investing Rs. 100 I can get some control in management or take part in its operations, then also it will be my Direct Investment. However, if I think that why to take
so much of headache, and I just want to make money by investing on its “listed” securities, make money when price of securities go up and exit, it will be “portfolio” investment. Now
prefix Foreign with these two terms and u know what is difference between FDI and FPI. In this question , options 1, 2 & 3 are correct.
4) A , 5) A, 6) A, 7) B ,8) C,9) B, 10) B
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