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Test: Indian Economy and Indian Financial System - 4 - Bank Exams MCQ


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100 Questions MCQ Test Mock Test Series for JAIIB Exam 2025 - Test: Indian Economy and Indian Financial System - 4

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Test: Indian Economy and Indian Financial System - 4 - Question 1

Assertion: The Green Revolution in agriculture led to a significant increase in food production.
Reason: The Green Revolution introduced advanced agricultural practices and high-yielding crop varieties.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 1
  • The assertion is true. The Green Revolution, which occurred in the mid-20th century, was a series of agricultural advancements that led to a significant increase in food production, particularly in countries like India.
  • The reason is also true and provides the correct explanation for the assertion. The Green Revolution introduced advanced agricultural practices, improved irrigation methods, and high-yielding crop varieties. These innovations collectively contributed to increased agricultural productivity and food security.
Test: Indian Economy and Indian Financial System - 4 - Question 2

Which of the following statements accurately explains the significance of the tertiary sector in the economy?
Statement I: The tertiary sector is primarily involved in manufacturing and processing activities.
Statement II: The tertiary sector contributes directly to the creation of finished goods and products.
Statement III: The tertiary sector is characterized by services that cater to the needs of consumers and businesses.
Statement IV: The tertiary sector does not play a substantial role in generating employment opportunities.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 2
  • Statement I is false. The tertiary sector is not primarily involved in manufacturing and processing activities. It is service-oriented and focuses on providing various services to consumers and businesses.
  • Statement II is true. The tertiary sector does not directly contribute to the creation of finished goods and products. Instead, it provides services that enhance the quality of life and support economic activities.
  • Statement III is true. The tertiary sector is indeed characterized by services that cater to the needs of consumers and businesses. These services range from healthcare and education to retail and hospitality.
  • Statement IV is false. The tertiary sector is a significant generator of employment opportunities. Services such as retail, healthcare, education, and entertainment provide employment to a large portion of the workforce.
Test: Indian Economy and Indian Financial System - 4 - Question 3

After ensuring the validity of the claim, the requisite amount is disbursed in the name of the concerned beneficiary or nominee or the legal heir. This amount is known as the ________ of the life insurance policy.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 3
  • Claim amount can be defined as the sum payable at the maturity of an insurance policy or upon death of the person insured to the beneficiary or the nominee or the legal heir of the insured.
  • Whenever a claim is raised by the policyholder or his beneficiary on the basis of the specifications of the policy statement, the insurance company conducts a review to ascertain the validity of the claim and ensure that the claim is not false as per the norms.
  • After ensuring the validity of the claim, the requisite amount is disbursed in the name of the concerned beneficiary or nominee or the legal heir. This amount is known as the claim amount of the life insurance policy.
Test: Indian Economy and Indian Financial System - 4 - Question 4

The IS-LM model or a Keynesian macroeconomic model shows how the market for economic goods interacts with ________.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 4
  • The IS-LM model, which stands for "investment-saving" (IS) and "liquidity preference-money supply" (LM) is a Keynesian macroeconomic model that shows how the market for economic goods (IS) interacts with the loanable funds market (LM) or money market. It is represented as a graph in which the IS and LM curves intersect to show the short-run equilibrium between interest rates and output.
  • Hence, option (b) is the correct answer.
Test: Indian Economy and Indian Financial System - 4 - Question 5

Which among the following is NOT among the major sources of financing in economic planning of India?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 5

The three major sources of finance available for financing plans in India, are

  • Domestic Budgetary Sources,
  • Foreign Assistance, and
  • Deficit Financing.

Hence, option (b) is the correct answer.

Test: Indian Economy and Indian Financial System - 4 - Question 6

Which of the following are the objectives of EASE 4.0 in PSBs?
(I) Achieving 24x7 availability of banking services through resilient technology.
(II) Embedding digital and data to drive customer-centric transformation in PSBs.
(III) Maximizing synergies with collaborative banking for coordinated handling of loans.
(lV) Isolating PSBs from collaborations with other financial institutions

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 6

The objectives of EASE 4.0 in PSBs are as follows:

(I) Achieving 24x7 availability of banking services through resilient technology: This objective focuses on ensuring the uninterrupted availability of banking services by leveraging resilient technology. It aims to provide customers with continuous access to banking services.

(II) Embedding digital and data to drive customer-centric transformation in PSBs: This objective involves incorporating digital and data-driven approaches to bring about a transformation in PSBs that is centered around customer needs and preferences. It aims to enhance customer experience and streamline banking operations.

(III) Maximizing synergies with collaborative banking for coordinated handling of loans: This objective is aimed at maximizing synergies through collaboration between PSBs and the broader financial services ecosystem, such as NBFCs. The focus is on effective coordination and handling of loans to improve efficiency and outcomes.

(IV) Isolating PSBs from collaborations with other financial institutions: This is not one of the objectives of EASE 4.0. The agenda of EASE 4.0 is to enhance banking services, incorporate digital transformation, and promote collaboration, rather than isolating PSBs from collaborations

Test: Indian Economy and Indian Financial System - 4 - Question 7

What role do non-banking financial companies (NBFCs) play in relation to the banking system?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 7

Non-Banking Financial Companies (NBFCs) play a complementary role to the banking system, which is best captured by option (c). Here's why:

  • Enhancing Competition: NBFCs introduce healthy competition in the financial sector. Their presence encourages traditional banks to offer more competitive rates and services to attract customers. This competition benefits consumers by providing them with a wider range of financial products and services to choose from.
  • Diversification: NBFCs often specialize in areas where traditional banks might not have a strong presence, such as microfinance, infrastructure financing, retail lending, and more. This diversification allows NBFCs to cater to specific customer needs that might not be fully addressed by traditional banks.
  • Reaching Underserved Segments: NBFCs often reach out to underserved or unbanked segments of the population, especially in rural and semi-urban areas. This helps in promoting financial inclusion and economic growth in regions that might not have easy access to traditional banking services.
  • Innovation: NBFCs are known for their ability to innovate and develop tailored financial solutions to meet the unique needs of different customer segments. This innovation can drive the overall financial services industry forward and encourage traditional banks to adopt new approaches.
  • Infrastructure Financing: NBFCs can contribute to the development of infrastructure by providing specialized financing for projects that might not fit within the scope of traditional banking activities.
Test: Indian Economy and Indian Financial System - 4 - Question 8

Choose the correct option with respective statements in similar order as either True or False from the given statements:
(I) In 1991, India initiated liberalisation and opened its economy to the world.
(II) The Narasimham Committee-I recommended the establishment of a 4-tier hierarchy for the banking structure in India.
(III) The first Gulf War in August 1990 led to a doubling of oil prices, adversely affecting India's balance of payments.
(IV) India's slow growth rate during the 1960s to 1980s was primarily due to rapid export-led growth similar to the Asian Tigers.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 8

(I) True: In 1991, India indeed initiated liberalization and opened its economy to the world. This marked a significant turning point in India's economic policy, leading to reforms in various sectors and a more open approach to international trade and investment.

(II) True: The statement is true. The Narasimham Committee-I, headed by Shri M. Narasimham, recommended the establishment of a 4-tier hierarchy for the banking structure in India. This hierarchy included a top tier of 3 to 4 large banks, with the State Bank of India (SBI) among them. At the bottom, there were rural banks engaged in agricultural activities.

(III) True: The statement is true. The first Gulf War that occurred in August 1990 did lead to a doubling of oil prices. This sudden increase in oil prices had an adverse impact on India's balance of payments, as the country heavily depended on crude oil imports.

(lV) False: The statement is false because India's slow growth rate during the 1960s to 1980s was not due to rapid export-led growth like the Asian Tigers. Instead, India's growth was hindered by factors such as inward-focused economic policies, lack of structural reforms, and insufficient investments in key areas.

Test: Indian Economy and Indian Financial System - 4 - Question 9

What is the difference between "On-Us" and "Off-Us" transactions in the context of ATMs?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 9

In the context of ATMs, "On-Us" transactions are those where a customer uses their debit or credit card at an ATM owned by the same bank that issued the card. These transactions are conducted within the bank's own network. On the other hand, "Off-Us" transactions occur when a cardholder uses their card at an ATM of a different bank. This involves using a different bank's network to process the transaction

Test: Indian Economy and Indian Financial System - 4 - Question 10

__________ is the quantity of a commodity that people are willing to buy at a particular price at a particular point of time.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 10
  • Quantity demanded is the quantity of a commodity that people are willing to buy at a particular price at a particular point of time.
  • Different quantities can be demanded at different prices at a particular point of time. When all the prices, along with quantity demanded, are drawn on a graph, the demand curve is formed. Quantity demanded can change at the same price depending upon factors like recession, changes in the taste of the consumer, etc.
Test: Indian Economy and Indian Financial System - 4 - Question 11

For proceeds of issues exceeding Rs, ___ need to be monitored through a Monitoring Agency.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 11

For proceeds of issues exceeding Rs 500 crore need to be monitored through a Monitoring Agency. Financial institutions can only act as Monitoring agencies. SEBI is the regulator for the Monitoring Agency assignments.

Test: Indian Economy and Indian Financial System - 4 - Question 12

_____________ in a trade agreement is aimed at preventing third parties from routing their products through member countries to take advantage of low tariff.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 12

The 'Rule of Origin' is a term used in all trade agreements. It is aimed at preventing third parties from routing their products through member countries to take advantage of low tariff and allowing only goods that are originated from parties to the agreement

Test: Indian Economy and Indian Financial System - 4 - Question 13

Which term refers to a financial instrument that represents a debt obligation of the issuer?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 13

The term "Debenture" denotes a significant financial instrument that holds the characteristic of representing a distinct debt obligation on the part of the issuer. A debenture embodies a contractual agreement where the issuer borrows funds from the debenture holders and commits to make fixed interest payments at regular intervals. This financial instrument highlights the issuer's commitment to repay the principal amount upon maturity, in addition to honoring the specified interest payments. Investors who hold debentures are essentially creditors to the issuer, and their returns are derived from the interest earned on the debenture. Debentures encompass various types, such as secured and unsecured debentures, convertible debentures, and redeemable debentures, each offering distinct features to cater to different investor preferences and issuer requirements. This financial instrument plays a pivotal role in the financial landscape by offering a secure avenue for entities to raise capital while providing investors with a reliable fixed-income option.

Test: Indian Economy and Indian Financial System - 4 - Question 14

Which among the following security is not eligible for a repo transaction?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 14

Repo transactions are permitted between counterparties and in instruments permitted by the Reserve Bank of India. The eligible securities for Repo transactions are Government securities issued by the Central Government or a State Government, listed corporate bonds, and debentures (subject to the condition that no participant shall borrow against the collateral of its securities, or securities issued by a related entity), Commercial Papers (CPs), Certificate of Deposits (CDs), and Units of Debt Exchange Traded Funds (ETFs). Besides, any other security of a local authority, as may be specified on this behalf by the Central Government, is eligible for Repo transaction.

Test: Indian Economy and Indian Financial System - 4 - Question 15

The WTO operates on the principle of ____________, ensuring that trade is conducted without discrimination or preference.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 15

The WTO operates on the principle of Most Favored Nation (MFN), which means that each member country must treat all other WTO members equally in terms of trade preferences. This principle ensures that trade is conducted without discrimination or preferences, promoting fair and non-discriminatory trade practices among nations.

Test: Indian Economy and Indian Financial System - 4 - Question 16

The Reserve Bank of India was set up based on the recommendations of which commission?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 16

RBI was conceptualized as per the guidelines, working style and outlook presented by Bhimrao Ramji Ambedkar in his book titled "The Problem of the Rupee - Its origin and its solution" and presented to the Hilton Young Commission. The bank was set up based on the recommendations of the 1926 Royal Commission on Indian Currency and Finance, also known as the Hilton - Young Commission.

Test: Indian Economy and Indian Financial System - 4 - Question 17

Which among the following is an example of a debt market?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 17

The debt market consists, largely, of government securities and to a smaller extent, corporate bonds. A Government Security (G-Sec) is a tradeable instrument issued by the Central Government or a State Government. It is a document of the Government's debt obligation. Long-term securities are also issued by State Governments and these are called State Development Loans (SDLs). Companies raise funds for a longer period, say 5 years or 10 years, through the issue of a typical long-term debt instrument, known as Corporate Bonds. A company that is engaged in infrastructure projects may issue debentures as a source of long-term funds.

Test: Indian Economy and Indian Financial System - 4 - Question 18

Which of the following statements are incorrect relating with Centrally Sponsored Schemes (CSS)?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 18

Centrally Sponsored Schemes (CSSs) are special purpose grants (or loans) extended (centre to States under Article 282 ) by the Central Government to States to encourage and motivate State governments to plan and implement programmes. CSS divided into two :-

  • Core of the Core Schemes and
  • Core Schemes.

Chaturvedi committee related with related with Restructuring of Centrally Sponsored Schemes

Test: Indian Economy and Indian Financial System - 4 - Question 19

Which among the following are approved tri-party agents?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 19

Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody, and management during the life of the transaction. The tri-party agent does not change the relationship between the borrower and lender, and he does not participate in the risk of transactions. In case of any default, the impact still falls entirely on the defaulting party. CCIL and NSE are two approved tri-party agents.

Test: Indian Economy and Indian Financial System - 4 - Question 20

Assertion: Sustainable Development Goals (SDGs) were established by the United Nations to address global challenges and promote sustainable economic, social, and environmental progress.

Reason: There are a total of 15 Sustainable Development Goals, each addressing a specific aspect of development and sustainability.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 20

Assertion: Sustainable Development Goals (SDGs) were established by the United Nations to address global challenges and promote sustainable economic, social, and environmental progress.

Reason: There are a total of 15 Sustainable Development Goals, each addressing a specific aspect of development and sustainability.

The Assertion is true. The Sustainable Development Goals (SDGs) were indeed established by the United Nations as a universal call to action to end poverty, protect the planet, and ensure prosperity for all. However, the Reason is false. There are a total of 17 Sustainable Development Goals, not 15. Each goal addresses various aspects of development, including poverty, hunger, health, education, gender equality, clean water, climate action, and more.

Test: Indian Economy and Indian Financial System - 4 - Question 21

How are insurance agents and insurance brokers licensed and regulated?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 21
  • Insurance agents and insurance brokers are required to be licensed and regulated by the Insurance Regulatory and Development Authority (IRDA). The IRDA is the regulatory body that oversees the insurance industry in India and ensures that insurance intermediaries operate in a fair, transparent, and compliant manner.
  • Insurance agents and brokers play a critical role in the insurance industry by acting as intermediaries between consumers seeking insurance coverage and insurance companies providing those policies. The IRDA sets specific guidelines, rules, and regulations that these intermediaries must adhere to in order to protect the interests of both consumers and insurance companies.
  • Being licensed by the IRDA means that insurance agents and brokers are authorized to engage in insurance-related activities and offer insurance products to consumers. These intermediaries are required to follow the Code of Conduct and other regulations laid down by the IRDA to ensure ethical and professional behavior in their interactions with clients and insurance companies.
  • In summary, insurance agents and brokers are licensed and regulated by the Insurance Regulatory and Development Authority (IRDA) to ensure the proper functioning of the insurance industry and the protection of stakeholders' interests.
Test: Indian Economy and Indian Financial System - 4 - Question 22

Assertion: The main function of an American Depository Receipt (ADR) is to allow American investors to directly purchase shares of Indian companies.

Reason: ADRs are issued by Indian companies to raise capital in the American market.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 22

The correct answer is (c) Assertion is true, but the Reason is false. The Assertion accurately states that the primary function of an American Depository Receipt (ADR) is to enable American investors to indirectly own shares of foreign companies. ADRs are essentially certificates representing shares of a foreign company and are traded on U.S. exchanges. However, the Reason provided is incorrect. ADRs are not issued by Indian companies to raise capital in the American market; rather, they are issued by foreign companies, including Indian ones, as a means of facilitating trading and investment in their shares by American investors. The issuance of ADRs allows these foreign companies to tap into the U.S. investor base without directly listing their shares on U.S. exchanges. Therefore, while the Assertion is accurate, the Reason is not in alignment with the actual purpose and origin of ADRs.

Test: Indian Economy and Indian Financial System - 4 - Question 23

Which of the following instruments is commonly associated with the Capital Markets in India?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 23

In the context of the Indian Capital Markets, the instrument commonly associated is Repurchase Agreements (Repo). A Repo transaction involves the sale of securities, typically government securities, by one party to another with a commitment to repurchase them at a predetermined future date and price. This mechanism serves as a crucial avenue for short-term borrowing and lending, providing financial institutions with a means to manage liquidity and access short-term funds using securities as collateral. The Repo market plays a pivotal role in optimizing cash flows, facilitating efficient liquidity management, and enhancing the overall stability of the financial system by leveraging the security of government securities as the underlying collateral.

Test: Indian Economy and Indian Financial System - 4 - Question 24

Which of the following statements are correct regarding the parameters governing Deposit Taking NBFCs (NBFC-Ds) and their operations?
(l) NBFC-Ds are permitted to accept and renew public deposits for durations ranging from 12 to 60 months but are not repayable on demand.
(II) NBFC-Ds are allowed to offer interest rates higher than the ceiling rate set by RBI.
(III) The interest on deposits with NBFC-Ds can be paid or compounded at rests shorter than monthly rests.
(IV) NBFC-Ds are permitted to offer gifts, incentives, or additional benefits to depositors

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 24

(l) NBFC-Ds are permitted to accept and renew public deposits for durations ranging from 12 to 60 months but are not repayable on demand-. This statement is correct. NBFC-Ds are allowed to accept and renew public deposits for specific durations, ensuring they are not repayable on demand.

(III) The interest on deposits with NBFC-Ds can be paid or compounded at rests shorter than monthly rests.-This statement is correct. The interest on deposits with NBFC-Ds can be calculated and either paid or compounded, but this cannot be done at rests shorter than monthly intervals.

Incorrect Statements:

(II) NBFC-Ds are allowed to offer interest rates higher than the ceiling rate set by RBI.

- This statement is incorrect. NBFC-Ds are restricted from offering interest rates that exceed a certain ceiling rate prescribed by the RBI.

(IV) NBFC-Ds are permitted to offer gifts, incentives, or additional benefits to depositors.- This statement is incorrect. NBFC-Ds are not allowed to provide gifts, incentives, or any supplementary advantages to their depositors

Test: Indian Economy and Indian Financial System - 4 - Question 25

Yield of the Sovereign bonds are dependent on which of the following factors?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 25

The Yield of the Sovereign bonds are dependent on primarily 3 factors-

  • Creditworthiness - The issuing countries' perceived ability to repay their debts. This can be obtained from rating agencies.
  • Country Risk - External/Internal factors like unrest and wars tend to jeopardize a country's ability to pay off their debts.
  • Exchange Rates- In cases where bonds are issued in foreign currency, fluctuations in exchange rate may lead to increased pay out pressure on the issuing government. The central banks also control the supply of money within the economy by the use of these bonds.
Test: Indian Economy and Indian Financial System - 4 - Question 26

What change occurred in the constitution of IFCI to facilitate raising funds directly through capital markets?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 26

The Industrial Finance Corporation of India (IFCI) changed its constitution from a statutory corporation to a company under the Indian Companies Act, of 1956. This change in the constitution was undertaken to facilitate raising funds directly through capital markets. By becoming a company, IFCI gained the ability to raise funds by issuing shares and accessing the capital markets for its financial needs. This transformation allowed IFCI to adapt to the changes in the Indian economy brought about by liberalization, which significantly altered the Indian Capital Markets and the Financial System

Test: Indian Economy and Indian Financial System - 4 - Question 27

Assertion: The contribution of the primary sector to GDP in most developed countries is higher compared to the contribution of the tertiary sector.

Reason: The primary sector involves industries that are labour-intensive and create more employment opportunities.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 27
  • The assertion is true. In most developed countries, the contribution of the primary sector (agriculture, mining, etc.) to GDP is lower compared to the contribution of the tertiary sector (services).
  • The reason is false. The primary sector is often associated with labour-intensive activities, but this does not necessarily mean it creates more employment opportunities compared to the tertiary sector. In fact, the tertiary sector, being service-oriented, can also generate significant employment opportunities, especially in sectors like education, healthcare, retail, and more.
Test: Indian Economy and Indian Financial System - 4 - Question 28

Case Study: DEF Corporation is a company planning to make a Qualified Institutional Placement (QIP) to raise funds. Which of the following statements is true regarding the role of merchant bankers in a QIP?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 28

In the context of DEF Corporation's Qualified Institutional Placement (QIP) to raise funds, the accurate statement regarding the role of merchant bankers is option (B): Merchant bankers ensure that the offering complies with foreign exchange regulations. In a QIP, merchant bankers play a crucial role in structuring and facilitating the placement of securities to qualified institutional buyers. One of their key responsibilities is to ensure that the offering adheres to various regulatory guidelines, including foreign exchange regulations. This involves ensuring that the issuance of securities to foreign institutional investors (FIIs) and non-resident Indians (NRIs) complies with the necessary foreign exchange control norms. By overseeing the compliance with these regulations, merchant bankers help to maintain the integrity and legality of the fundraising process, benefiting both the issuing company and the investors participating in the QIP. Unlike the other options mentioned, which do not directly align with the merchant bankers' role in a QIP, ensuring regulatory compliance is a fundamental aspect of their involvement in such offerings.

Test: Indian Economy and Indian Financial System - 4 - Question 29

Assertion: The tertiary sector is also known as the service sector.

Reason: The tertiary sector primarily involves the extraction of natural resources.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 29
  • The assertion is true. The tertiary sector is indeed known as the service sector, as it involves activities related to providing services rather than producing goods.
  • However, the reason is not the correct explanation for the assertion. The tertiary sector does not involve the extraction of natural resources. Instead, it encompasses activities such as retail, education, healthcare, hospitality, finance, and various other services that cater to the needs of consumers and businesses.
Test: Indian Economy and Indian Financial System - 4 - Question 30

What is the primary objective of Corporate Social Responsibility (CSR) activities undertaken by businesses?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 30

The primary objective of Corporate Social Responsibility (CSR) activities undertaken by businesses is to contribute to sustainable development by addressing social and environmental issues. CSR involves businesses voluntarily integrating social and environmental concerns into their operations and interactions with stakeholders. Through CSR initiatives, companies strive to have a positive impact on society by addressing challenges such as poverty, inequality, environmental degradation, and community well-being. These activities go beyond profit-making and reflect a commitment to responsible and ethical business practices that benefit both the company and the broader community. While profit maximization is an important goal for businesses, CSR acknowledges the broader responsibilities companies have toward society and the environment.

Test: Indian Economy and Indian Financial System - 4 - Question 31

The Government Securities are issued to the investors by credit to their ______account

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 31

The Government Securities shall be issued to the investors by credit to their Constituent Subsidiary General Ledger (CSGL) accounts which can be opened with banks and Primary Dealers or in dematerialised form in demat accounts maintained with NSDL or any other institution authorised by RBI.

Test: Indian Economy and Indian Financial System - 4 - Question 32

Which among the following features is correct regarding Red Herring Prospectus (RHP)?
(i) It has no details of the price or number of shares offered
(ii) It should be made open for an offer for one month
(iii) The price is done through a bidding process
(iv) An RHP for an FPO can be filed with the ROC, without the price band.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 32

It is a prospectus that does not have details of either price or number of shares being offered or the amount of issue. An RHP for an FPO can be filed with the ROC, without the price band. It can be notified by way of an advertisement, one day prior to the opening of the issue. The price is also done through a bidding process, the details of the final price are included in the offer document. The offer document filed then with ROC is called a prospectus.

Test: Indian Economy and Indian Financial System - 4 - Question 33

___________ refers to short-term loans that banks and financial institutions lend to each other in the money market.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 33

Call Money represents short term loans with no fixed maturity, commonly used among financial institutions for managing short term liquidity.

Test: Indian Economy and Indian Financial System - 4 - Question 34

Choose the correct option with respective statements in similar order as either True or False from the given statements :
(l) Amendments to the RBI Act in 1997 granted the Reserve Bank of India (RBI) comprehensive powers to regulate and supervise NBFCs.
(ll) One of the amendments required NBFCs to maintain a certain percentage of their assets in unencumbered approved securities, particularly for deposit-taking NBFCs.
(lll) The RBI was empowered to prescribe policies for NBFCs to adhere to, including aspects like income recognition and accounting standards.
(lV) The requirement to maintain a minimum level of Net-Owned Funds (NOF) was removed for NBFCs in the amendments of 1997.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 34

(I) Amendments to the RBI Act in 1997 granted the Reserve Bank of India (RBI) comprehensive powers to regulate and supervise NBFCs.
True. The amendments in 1997 provided the RBI with extensive authority for overseeing and regulating NBFCs.

(ll) One of the amendments required NBFCs to maintain a certain percentage of their assets in unencumbered approved securities, particularly for deposit-taking NBFCs.
True. A specific amendment stipulated that deposit-taking NBFCs were obligated to hold a certain proportion of their assets as unencumbered approved securities.

(lll) The RBI was empowered to prescribe policies for NBFCs to adhere to, including aspects like income recognition and accounting standards.
True. The amendments granted the RBI the authority to establish policies that NBFCs were required to follow, encompassing areas such as income recognition and accounting standards.

(lV) The requirement to maintain a minimum level of Net-Owned Funds (NOF) was removed for NBFCs in the amendments of 1997.
False. Contrary to this, the amendments of 1997 introduced a stipulation mandating NBFCs to uphold a specified minimum level of Net-Owned Funds

Test: Indian Economy and Indian Financial System - 4 - Question 35

Which among the following statements is incorrect regarding Commercial paper?
(i) CPs cannot be issued on a "stand-alone" basis.
(ii) The aggregate amount of CP from the issuer must be within the limit, as approved by its Board of Directors or the quantum indicated by the Credit Rating Agency whichever is lower.
(iii) The CP issued can exceed 100% of the Company's net owned funds, as per the latest audited balance sheet.
(iv) There is no limit for FII to invest in CP

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 35

CPs can be issued on a "stand-alone" basis. The aggregate amount of CP from an issuer shall be within the limit, as approved by its Board of Directors or the limit prescribed by the Credit Rating Agency, whichever is lower. Banks and FIs will, however, have the flexibility to fix working capital limits, financing including CPs. An FI can issue CPs, within the overall umbrella limit fixed by the RBI, i.e., the quantum for which the CPs can be issued together with other instruments, viz., term money borrowings, term deposits, certificates of deposit, and inter-corporate deposits should not exceed 100% of the Company's net owned funds, as per the latest audited balance sheet. However, investment by FIIs should be within the limits set for their investments by SEBI. Mutual Funds, Banks, Insurance companies, etc.

Test: Indian Economy and Indian Financial System - 4 - Question 36

Consider the following statements and choose the correct answer.
I. The concept of sustainable development was emphasised by World Health Organization.
II. In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 36

Statement I: Incorrect

  • The concept of sustainable development was emphasised by the United Nations Conference on Environment and Development (UNCED), which defined it as: 'Development that meets the need of the present generation without compromising the ability of the future generation to meet their own needs'.

Statement II: Correct

  • In 2015, the UN formulated 17 Sustainable Development Goals (SDGs) intended to be achieved by the year 2030.
Test: Indian Economy and Indian Financial System - 4 - Question 37

Which among the following statements is correct regarding CD?
(i) CD is issued at a discounted price and redeemed at par value.
(ii) The minimum amount of a CD should be `3 lakh
(iii) Buyback of CDs at prevailing market price can be made only 7 days after the date of issue of the CD.
(iv) Non-Resident Indians are also permitted to subscribe to CDs.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 37

Certificate of deposit is a negotiable money market instrument issued in dematerialised form, by scheduled commercial banks (including Regional Rural Banks (RRBs) and Small Finance Banks (SFBs)); and select all-India Financial Institutions that have been permitted by RBI to raise short-term resources. CDs are discounted instruments and are issued at a discounted price and redeemed at par value. While the tenor of issue can range from 7 days to 1 year, most CDs are issued by banks for 3, 6, and 12-month tenors. CDs can be issued to individuals (other than minors), corporations, companies, trusts, funds, associations, etc.

Non-Resident Indians are also permitted to subscribe to CDs. However, they are mainly subscribed to by banks, mutual funds, provident and pension funds, and insurance companies. The minimum amount of a CD should be `5 lahks, i.e., the minimum deposit that can be accepted from a single subscriber should not be less than `5 lakh, and CDs are accepted in multiples of `5 lakh thereafter. Banks are not allowed to grant loans against CDs unless specifically permitted by the Reserve Bank. Buyback of CDs at the prevailing market price can be made only 7 days after the date of issue of the CD.

Test: Indian Economy and Indian Financial System - 4 - Question 38

Choose the correct option with respective statements in similar order as either True or False from the given statements :
(I) SEBI registers and regulates intermediaries like stock brokers and merchant bankers in the securities market.
(ll) SEBI prevents fraudulent practices and ensures transparency in the securities market.
(lll) SEBI inspects records of suspected companies engaged in insider trading or fraud.
(lV) SEBI collects taxes on securities market transactions

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 38

(I) true. SEBI (Securities and Exchange Board of India) is responsible for registering and regulating various intermediaries like stock brokers, merchant bankers, and other entities involved in the securities market.
(ll) true. SEBI plays a crucial role in preventing fraudulent practices, ensuring transparency, and protecting the interests of investors in the securities market.
(lll) true. SEBI has the authority to undertake inspections of records, books, and documents of suspected companies that are involved in insider trading or fraudulent practices in the securities market.
(lV) false. SEBI does not collect taxes on securities market transactions. It is primarily responsible for regulating and overseeing the securities market to ensure transparency, investor protection, and fair practices.

Test: Indian Economy and Indian Financial System - 4 - Question 39

Considering the finance ratios, which of the following is true?
I. It should be compared against competitors' ratios.
II. It can be observed over time to detect trends.
III. It can be used to benchmark management performance.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 39

Corporate Finance Ratios enable analysts, management, and investors to assess the financial performance of a company by ranking them against time-series data, competitor ratios, or performance targets.

Test: Indian Economy and Indian Financial System - 4 - Question 40

In the context of the stock market, the term "__________" refers to the price at which an investor can sell a security immediately.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 40

In the dynamic landscape of the stock market, the term "Ask Price" holds a distinct significance as it signifies the price at which an investor can promptly sell a security. This price point encapsulates the value at which sellers in the market are willing to part with their securities at that particular moment. Investors seeking to liquidate their holdings and realize immediate gains or mitigate potential losses rely on the Ask Price to gauge the value they can expect for their assets when engaging in a quick sale. The Ask Price, therefore, mirrors the prevailing sentiment among sellers and encapsulates the willingness of market participants to part with their securities at a specific price level. This essential market parameter provides insights into the real-time dynamics of supply and demand, influencing the trading decisions of investors and contributing to the continuous price discovery process within the stock market ecosystem.

Test: Indian Economy and Indian Financial System - 4 - Question 41

What event spurred the establishment of a banking regulator during the pre-independence phase?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 41

During the pre-independence phase, there was extreme turbulence in the financial market, leading to the closing down of a number of banks. This turbulent situation highlighted the need for a regulatory body to oversee and stabilize the banking sector. Consequently, the establishment of a banking regulator was spurred by the challenges and failures faced by various banks during that period.

Test: Indian Economy and Indian Financial System - 4 - Question 42

What was the purpose of the Deposit Insurance Corporation (DIC) in India, established in 1962?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 42

The purpose of the Deposit Insurance Corporation (DIC) in India, established in 1962, was to provide insurance cover for bank deposits. This measure aimed to instill confidence among depositors in the banking system, particularly in the wake of past instances of bank failures. With the DIC in place, depositors were assured that their funds up to a certain limit would be protected in case of a bank failure. This insurance cover played a pivotal role in maintaining trust in the banking sector and enhancing overall financial stability.

Test: Indian Economy and Indian Financial System - 4 - Question 43

Match the following Global Issues and Initiatives with their corresponding descriptions:

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 43
  • The Convention on Biological Diversity (CBD) is an international initiative that seeks to conserve biodiversity, promote sustainable resource use, and ensure fair sharing of benefits derived from genetic resources.
  • The United Nations High-Level Political Forum (HLPF) is a platform for reviewing progress on Sustainable Development Goals (SDGs), sharing experiences, and facilitating discussions on sustainable development.
  • The Global Poverty Reduction Initiative involves coordinated efforts, development programs, and international partnerships to alleviate poverty and improve living conditions.
  • The World Trade Organization (WTO) facilitates global trade negotiations, reduces trade barriers, and promotes economic cooperation among member countries.
Test: Indian Economy and Indian Financial System - 4 - Question 44

Assertion: Climate change refers to long-term shifts in global or regional climate patterns, often resulting from human activities that release greenhouse gases.

Reason: The burning of fossil fuels, deforestation, and industrial processes contribute to the buildup of greenhouse gases in the atmosphere, leading to alterations in the Earth's climate.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 44

Assertion: Climate change refers to long-term shifts in global or regional climate patterns, often resulting from human activities that release greenhouse gases.

Reason: The burning of fossil fuels, deforestation, and industrial processes contribute to the buildup of greenhouse gases in the atmosphere, leading to alterations in the Earth's climate.

Both the Assertion and the Reason are true. Climate change is indeed caused by human activities that release greenhouse gases, such as carbon dioxide and methane, into the atmosphere. These gases trap heat, leading to global warming and changes in climate patterns. The Reason correctly explains the link between human activities and the buildup of greenhouse gases, which ultimately result in climate change.

Test: Indian Economy and Indian Financial System - 4 - Question 45

Under the InvITs revenue model, investors, in lieu of invested money, receive a share of NDCF - similar to the dividend pay-outs) on a periodic basis, commensurate with their unit holding in the Trust. What does D stand for in NDCF

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 45

Under an InvIT transaction, infrastructure asset owners transfer multiple revenue-generating assets' special purpose vehicles (SPVs), through a holding company or otherwise to a trust, which then issues units to investors for raising money. The investors, in lieu of invested money, receive a share of Net Distributable Cash Flows (NDCF - similar to the dividend pay-outs) on a periodic basis, commensurate with their unit holding in the Trust. 90 percent of the net distributable cash flow is required to be distributed to the unit holders.

Test: Indian Economy and Indian Financial System - 4 - Question 46

Which of the following is NOT included in the calculation of Net Domestic Product?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 46

Net Domestic Product (NDP)
NDP is the value of net output of the economy during the year. Some of the country's capital equipment wears out or becomes outdated each year during the production process. Depreciation is also called Capital Consumption Allowance.

Thus Net Domestic Product = GDP - Depreciation.
Gross Domestic Product (GDP) is the total market value of final goods and services produced within the country during a year.
[GDP by expenditure method at market prices = C + I + G + (X - M) ]
[Where C - consumption goods; I - Investment goods; G - Government purchases;
X - Exports; M - Imports (X - M) is net export which can be positive or negative.]
So,
[Net Domestic Product = C + I + G + (X - M) - Depreciation]
Hence, option (c) is the correct answer.

Test: Indian Economy and Indian Financial System - 4 - Question 47

What does it mean when the Marginal Propensity of Consumption (MPC) value is 0 ?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 47

Marginal Propensity of Consumption is a measure of the change in consumption(spending) to the change in income. It takes value from 0 to 1. If the entire income is spent then it will take the value of 1 and if there is no spending at all, it will take the value of 0. So consumers don't increase consumption even as income increases.

Test: Indian Economy and Indian Financial System - 4 - Question 48

A few interdependent firms dominate the market and are likely to change their prices according to their competitors. This defines a _____________ market structure.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 48
  • An oligopolistic market is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated.
  • Oligopoly is when a small number of firms collude, either explicitly or tacitly, to restrict output and/or fix prices, in order to achieve above normal market returns.
Test: Indian Economy and Indian Financial System - 4 - Question 49

Which of the following is/are not the feature of the contactless payment?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 49
  • "Contactless payment" refers to a no-touch form of payment using a credit, debit, or gift card on a point-of-sale system equipped with adequate technology. Contactless-equipped cards use radio frequency identification (RFID) technology and near-field communication (NFC) to process transactions where possible. Contactless payment is an alternative to swiping or inserting a card into a card terminal. It's a fast, easy, and fairly secure form of payment for many cardholders and merchants.
  • Recently in news:- Punjab National Bank (PNB), and Patanjali Ayurved Limited (PAL) have launched co-branded contactless credit cards in partnership with the National Payments Corporation of India (NPCI). The co-branded credit cards are offered on NCPI's RuPay Platform and are available in two variants - PNB RuPay Platinum and PNB RuPay Select.
Test: Indian Economy and Indian Financial System - 4 - Question 50

Assertion: The Market Participants in the Forex Market primarily include central banks, financial institutions, corporations, and retail investors.

Reason: Retail investors have a limited role in the Forex Market due to high entry barriers and complexity.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 50

The correct answer is (b) Both Assertion and Reason are true, but the Reason is not a correct explanation of the Assertion. The Assertion is accurate in stating that the participants in the Forex Market encompass central banks, financial institutions, corporations, and retail investors, each contributing to the dynamics of the market. However, the Reason provided is not entirely correct in explaining why retail investors have a limited role in the Forex Market. While it's true that retail investors often face high entry barriers and complexities when engaging in forex trading due to factors like leverage, volatility, and market hours, their limited role isn't solely because of these challenges. In recent years, technological advancements and the availability of online trading platforms have made forex trading more accessible to retail investors, expanding their participation. Thus, while the Reason touches on some barriers faced by retail investors, it doesn't fully capture the broader dynamics influencing their role in the market.

Test: Indian Economy and Indian Financial System - 4 - Question 51

Globally, what is the position assumed by India in Renewable energy capacity?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 51

India stand stands in position globally in renewable power capacity. Additionally, it also stands in 4th position in wind power and 5th in solar power.

Test: Indian Economy and Indian Financial System - 4 - Question 52

Which of the following is not among the recommendations proposed by the Narasimham Committee-I?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 52

Branch licensing policy abolishment was recommended by this committee.

Test: Indian Economy and Indian Financial System - 4 - Question 53

The currency chests should invariably report all transactions through CyM – CC portal on the same day to RBI by?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 53

The currency chests should invariably report all transactions through CyM – CC portal on the same day to RBI by 7 pm.

Test: Indian Economy and Indian Financial System - 4 - Question 54

IFCI started its merchant banking activities in the year?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 54

IFCI started its operations in 1986.

Test: Indian Economy and Indian Financial System - 4 - Question 55

The process of deleveraging refers to the?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 55

The process of deleveraging refers to cutbacks in lending by financial institutions.

Test: Indian Economy and Indian Financial System - 4 - Question 56

In the case of matured SHGs, loans can be given up to:

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 56

There is no such limit on matured SHGs, loans can be given at the discretion of the bank.

Test: Indian Economy and Indian Financial System - 4 - Question 57

During the post reforms period, what was the main reason for the high growth rate the Indian economy experienced?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 57

Although a lot of factors resulted in the boom of economic growth of India, however the increase in the inflow of foreign capital under the new economic policy of 1991 can be considered the foremost catalyst making India, the world’s second fastest-growing economy after China from 1992 to 2008.

Test: Indian Economy and Indian Financial System - 4 - Question 58

What is the full form of NAV?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 58

The full form of NAV is Net Asset Value.

Test: Indian Economy and Indian Financial System - 4 - Question 59

Presently, what is the ceiling rate for interest prescribed to Deposit taking NBFCs?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 59

The ceiling rate for interest prescribed to Deposit taking NBFCs is 12.5%.

Test: Indian Economy and Indian Financial System - 4 - Question 60

If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 60

If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange rate risk by buying foreign exchange futures long.

Test: Indian Economy and Indian Financial System - 4 - Question 61

Which of the following statements is/are not correct?
(i) CPI reflects the level of prices of a basket of goods and services purchased/ consumed by the households
(ii) The weight of primary articles in WPI is 22.6%

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 61

Both the mentioned statements are correct.

Test: Indian Economy and Indian Financial System - 4 - Question 62

An employee’s contribution towards NPS is eligible for tax deduction under which section of the IT Act?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 62

An employee’s contribution towards NPS is eligible for tax deduction under sections 80CCD (1) & 80CCD 1(B).

Test: Indian Economy and Indian Financial System - 4 - Question 63

Redirection: The launch of the Udyam Registration Portal is one of the recent efforts made by the government to boost the ease of doing business for MSMEs. Micro Small-Enterprises Cluster development program (MSE-CDP), Prime Minister’s Employment generation program (PMEGP), Scheme of Fund for Regeneration of Traditional Industries, enabling IT ecosystems, hassle-free lending, etc. and many such schemes are used to incentivize to allow them to expand and flourish. In light of the statements above, answer the questions that follow.

Q. The provisions of RBI Master Direction on Lending to Micro, Small & Medium Enterprises (MSME) Sector shall apply to all Scheduled Commercial Banks excluding?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 63

RBI Master Direction on Lending to the MSME sector does not apply to Regional Rural Banks.

Test: Indian Economy and Indian Financial System - 4 - Question 64

Redirection: The launch of the Udyam Registration Portal is one of the recent efforts made by the government to boost the ease of doing business for MSMEs. Micro Small-Enterprises Cluster development program (MSE-CDP), Prime Minister’s Employment generation program (PMEGP), Scheme of Fund for Regeneration of Traditional Industries, enabling IT ecosystems, hassle-free lending, etc. and many such schemes are used to incentivize to allow them to expand and flourish. In light of the statements above, answer the questions that follow.

Q. Which of the following is not an Objective of the MSE-CDP program?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 64

Developing credit plans to guide and motivate the banking sector is not an Objective the of MSE-CDP program.

Test: Indian Economy and Indian Financial System - 4 - Question 65

Consider the following statements and choose the incorrect ones:

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 65

MSF is a facility under which banks are provided overnight funds when they face an acute shortage of funds.

Test: Indian Economy and Indian Financial System - 4 - Question 66

Which of the following is India’s first Credit Information Company?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 66

CIBIL is India’s first Credit Information Company.

Test: Indian Economy and Indian Financial System - 4 - Question 67

Which of the following statements is correct?
(i) The SDR is defined as equivalent to one US dollar
(ii) The SDR is defined as equivalent to 0.888671 grams of fine gold

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 67

The collapse of the Bretton woods system has resulted in redefining SDR as a basket of currencies rather than 0.888671 grams of fine gold or 1 US dollar.

Test: Indian Economy and Indian Financial System - 4 - Question 68

Direction: Study the following data and answer the questions that follow:

Q. What is the total Capital receipt?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 68

Capital receipt = non-Debt receipt + Debt receipt
6050 + 8470 = 14520

Test: Indian Economy and Indian Financial System - 4 - Question 69

Direction: Study the following data and answer the questions that follow:

Q. What is the amount of the total tax revenue?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 69

Total Tax revenue = Net tax revenue + Transfer to NCCD fund
3900 + 110 = 4010

Test: Indian Economy and Indian Financial System - 4 - Question 70

Direction: Study the following data and answer the questions that follow:

Q. What is the amount of the non-Debt receipt?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 70

Non-Debt receipt = Recoveries of loans and advances - Recoveries of short-term loans and advances from states and loans to government servants + Miscellaneous capital receipt.
6000 – 3400 + 3450 = 6050

Test: Indian Economy and Indian Financial System - 4 - Question 71

SIDBI’s loan scheme STAR can be de-abbreviated as?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 71

STAR can be de-abbreviated as SIDBI Term-Loan Assistance for Rooftop Solar PV Plants.

Test: Indian Economy and Indian Financial System - 4 - Question 72

Direction: Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs, and fees, and market forces determining the prices of securities that trade.
Financial markets can be found in nearly every nation in the world. Some are very small, with only a few participants, while others – like the Bombay Stock Exchange (BSE) and the forex markets – trade millions of rupees daily. Investors have access to a large number of financial markets and exchanges representing a vast array of financial products. Some of these markets have always been open to private investors; others remained the exclusive domain of major international banks and financial professionals until the very end of the twentieth century.

Q. Which of the following is a segment of the financial market?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 72

All of the above segments of the financial market.

Test: Indian Economy and Indian Financial System - 4 - Question 73

Direction: Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs, and fees, and market forces determining the prices of securities that trade.
Financial markets can be found in nearly every nation in the world. Some are very small, with only a few participants, while others – like the Bombay Stock Exchange (BSE) and the forex markets – trade millions of rupees daily. Investors have access to a large number of financial markets and exchanges representing a vast array of financial products. Some of these markets have always been open to private investors; others remained the exclusive domain of major international banks and financial professionals until the very end of the twentieth century.

Q. ______ is the organizations, or institutions that provide long-term funds.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 73

The capital market is the institution that provides term funds.

Test: Indian Economy and Indian Financial System - 4 - Question 74

Direction: Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs, and fees, and market forces determining the prices of securities that trade.
Financial markets can be found in nearly every nation in the world. Some are very small, with only a few participants, while others – like the Bombay Stock Exchange (BSE) and the forex markets – trade millions of rupees daily. Investors have access to a large number of financial markets and exchanges representing a vast array of financial products. Some of these markets have always been open to private investors; others remained the exclusive domain of major international banks and financial professionals until the very end of the twentieth century.

Q. The stock exchange is known as __________ market for securities.

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 74

The stock exchange is known as the Secondary market for securities.

Test: Indian Economy and Indian Financial System - 4 - Question 75

Which of the following is an example of direct finance?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 75

Purchasing shares in the stock market. Direct finance refers to the flow of funds from savers to borrowers without the involvement of financial intermediaries. Purchasing shares in the stock market is an example of direct finance.

Test: Indian Economy and Indian Financial System - 4 - Question 76

Which of the following is not a type of insurance?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 76

Contingency insurance is not a type of insurance.

Test: Indian Economy and Indian Financial System - 4 - Question 77

Why was 2011-12 chosen as the base year for the calculation of national accounts instead of 2009-10?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 77

The global crisis of 2007-08 resulted in the year 2009-10 being declared as an abnormal year and not fit to be considered a base year.

Test: Indian Economy and Indian Financial System - 4 - Question 78

Direction: Study the following paragraphs and answer the questions that follow:
The situation of government ownership of banks continued well into the 1990s when the first wave of liberalization ensured that banks were now allowed to be privately owned. While multinational banks were always privately owned, most Indian banks were government owned or owned in a quasi-governmental manner.
Even after liberalization, the RBI or the Reserve Bank of India proceeded cautiously as far as private ownership of the BFSI sector was concerned. However, this did not deter many firms such as the NBFCs or the Non-Banking Financial Companies from operating and indeed, flouting the rules thereby leading to periodic bouts of crises.

Q. Which is the first nationalized bank of India?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 78

Reserve Bank of India is the first nationalized bank of India.

Test: Indian Economy and Indian Financial System - 4 - Question 79

Direction: Study the following paragraphs and answer the questions that follow:
The situation of government ownership of banks continued well into the 1990s when the first wave of liberalization ensured that banks were now allowed to be privately owned. While multinational banks were always privately owned, most Indian banks were government owned or owned in a quasi-governmental manner.
Even after liberalization, the RBI or the Reserve Bank of India proceeded cautiously as far as private ownership of the BFSI sector was concerned. However, this did not deter many firms such as the NBFCs or the Non-Banking Financial Companies from operating and indeed, flouting the rules thereby leading to periodic bouts of crises.

Q. Lead Bank Scheme was introduced by the RBI in the year?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 79

Lead Bank Scheme was introduced by the RBI in 1969.

Test: Indian Economy and Indian Financial System - 4 - Question 80

EASE can be de-abbreviated as?

Detailed Solution for Test: Indian Economy and Indian Financial System - 4 - Question 80

EASE stands for "Enhanced Access and Service Excellence." This is a program launched by the Indian government in 2018 with the aim of providing enhanced access to banking services and promoting financial inclusion in the country. 

Test: Indian Economy and Indian Financial System - 4 - Question 81