Banks are required to invest certain percentage of their deposits in specified financial securities like Central Government or State Government securities. This percentage is known as

 

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Prelims -Economy

Question:

Banks are required to invest certain percentage of their deposits in specified financial securities like Central Government or State Government securities. This percentage is known as

 

-View

(a) Reverse Statutory Liquidity

(b) Marginal Liquidity Ratio

(c) Reverse Marginal Liquidity

(d) Statutory Liquidity Ratio

Check Answer:

Answer:
Explaination

 The RBI Act instructs that all commercial banks (and some other specified institutions) in the country have to keep a given proportion of their demand and time deposits (NDTL or net demand and time liabilities) as liquid assets in their own vault. This is called statutory liquidity ratio.  The word statutory here means that it is a legal requirement and liquid asset means assets in the form of cash, gold and approved securities (government securities). The RBI itself gives periodic updates about which assets are qualified as liquid assets under SLR. Similarly, it also gives institution specific guidelines for SLR to be kept.

Question:Consider the following statements. 1. A total fertility rate of about 2.1 children per woman is called replacement-level fertility. 2. Replacement-Level Fertility means a population is falling. Which of the above statements is/are true? -View

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 Nor 2

Check Answer:

Answer:
Explaination

• Replacement-Level Fertility, which means a population that is stable, neither rising nor falling. • The ministry of health has identified seven states–Assam, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Rajasthan and Uttar Pradesh–with high TFR. These states are home to 534.8 million people, or 44.2% of India’s population, according to 2011 Census data. Within these states, 145 districts have been selected for action to reduce TFR to 2.1 by 2025 while the India average of 2.1 will, according to the government, be achieved by the end of 2017. • In a bid to keep a check on the increasing population in the country, The Ministry of Health and Family Welfare has launched two new contraceptives- Antara and Chhaya. • They have been launched in 10 states under Mission ParivarVikas, a central family planning initiative. • These 10 states of Uttar Pradesh, Madhya Pradesh, Maharashtra, Rajasthan, Karnataka, Haryana, West Bengal, Odisha, Delhi and Goa. • http://www.thehindu.com/news/national/indias-fertility-rate-more-than-halves-over-40-years/article19124554.ece

Question:Consider the following. 1. Direct cash transfers 2. Coupons 3. Subsidies Which of the above is/are Green Box Subsidies as per WTO ?. -View

(a) Only 1 and 3

(b) Only 2

(c) 1, 2 and 3

(d) None of these

Check Answer:

Answer:
Explaination

 The WTO divides subsidies into amber, blue and green box subsidies. Amber box are trade-distorting subsidies, blue box are subsidies with restrictions designed to reduce distortion and green box subsidies are non-trade distorting subsidies. Direct cash transfers, coupons and subsidies that do not impact production are not considered trade-distorting subsidies and categorized as green box.  Member countries can challenge such subsidies imposed by trading countries in the WTO dispute settlement procedure. If the WTO feels the subsidy is harming international trade, it can ask the country to withdraw the subsidy. Countries with per capita gross national product of less than $1,000 are exempt from these conditions, while developing countries are given time to phase out these subsidies, called the “peace clause”. The current peace clause expires on December 31, 2015.

Question:Consider the following statements. 1. Foreign Investment is under capital account but dividends and income from investment comes under current account. 2. Trade deficit is not a component of Current Account Deficit. Which of the above statements is/are false?. -View

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 Nor 2

Check Answer:

Answer:
Explaination

 Foreign Investment is under capital account but dividends and income from investment comes under current account in the category income from abroad as dividend is transferred periodically, does not result in creation of asset or liability.  Current Account Deficit - deficit on all 4 components of current account. (Export – Import) + Net income from abroad + Net Transfers (Export – Import) is trade deficit CAD = Trade Deficit + Net Income From Abroad + Net transfers  Trade Deficit and CAD are not one and the same. Trade deficit is only a component of CAD.  http://www.livemint.com/Money/UL0weDmw7Bb1vEIEuR7IqM/Current-account-deficit-widens-to-24-of-GDP-in-Q1-shows-R.html

Question:Which of these is/are true?. -View

(a) The term ‘shell company’ is not defined under the Companies Act, 2013.

(b) Shell company is trading firm not often listed on a stock exchange.

(c) Both a and b

(d) Neither 1 Nor 2

Check Answer:

Answer:
Explaination

Shell company is a non-trading firm formed (and often listed on a stock exchange) as a vehicle to (1) raise funds before starting operations, (2) attempt a takeover, (3) for going public, or (4) as a front for an illegal business.

Question:Financial Stability and Development Council is chaired by -View

(a) Prime Minister

(b) Governor, RBI

(c) Chief Economic Advisor

(d) Finance Minister

Check Answer:

Answer: Finance Minister
Explaination

The idea to create it was first mooted by the Raghuram Rajan Committee on Financial Sector Reforms in 2008.