capf economy - Sheet1 Flashcards
1,”The focus of the Second Five Year Plan was:”,A. establishment of a self-reliant and self-generating economy with emphasis on agriculture.,B. rapid industrialization with emphasis on the development of basic and heavy industries.,C. removal of poverty and attainment of self-reliance.,D. acceleration of food-grain production and increase in employment opportunities and overall productivity.
1,B,”The focus of the Second Five Year Plan was rapid industrialization with emphasis on the development of basic and heavy industries. The Second Five Year Plan (1956-61) emphasized quick structural transformation and stressed on the rapid industrialization and the public sector. It was drafted and planned under the leadership of P.C Mahalanobis. The plan aimed to achieve a target growth rate of 4.5%, and although the actual growth rate slightly fell short of the target at 4.27%, it still focused heavily on industrialization.”
2,”An Indian businessperson buys shares in a British car company. This transaction will be reflected in:”,A. Balance of Trade, but not in Balance of Payments.,B. Balance of Payments, but not in Balance of Trade.,C. both Balance of Payments and Balance of Trade.,D. neither Balance of Payments nor Balance of Trade.
2,B,”When an Indian businessperson buys shares in a British car company, it is considered a financial transaction and is recorded in the financial account of the Balance of Payments, as it reflects the change in ownership of international assets. However, this transaction would not be reflected in the Balance of Trade, which only deals with the export and import of goods and services, not financial transactions.”
3,”Which of the following are High Frequency Indicators of the Indian economy ?”,A. Power Consumption,B. IIP General Index,C. 10-year G-sec yield,
3,B,”High Frequency Indicators (HFIs) of the Indian economy include Power Consumption and IIP General Index. These indicators provide real-time or near real-time data on various aspects of the economy and are used for monitoring economic activity and making policy decisions. Therefore, the correct answer is B. 1 and 2 only.”
4,”Suppose an Indian citizen makes an investment abroad and earns a positive return on her investment. Which of the following is correct ?”,A. Her income is part of India’s GDP, but not part of India’s national income.,B. Her income is part of India’s national income, but not part of India’s GDP.,C. Her income is part of both India’s GDP and national income.,D. Her income is neither part of India’s GDP, nor its national income.
4,B,”When an Indian citizen makes an investment abroad and earns a positive return on her investment, her income is part of India’s national income, but not part of India’s GDP. National income includes all income earned by residents of a country, which encompasses income from both domestic and foreign sources. GDP, on the other hand, measures the total market value of goods and services produced within a country’s borders and does not include income from abroad.”
5,”If the Cash Reserve Ratio is lowered by the RBI, supply of money in the economy will:”,A. remain unchanged,B. decrease,C. increase.,D. have ambiguous impact.
5,C,”If the Cash Reserve Ratio (CRR) is lowered by the RBI, the supply of money in the economy will increase. A lower CRR means that banks are required to hold a smaller amount of deposits as reserves, which frees up more funds for them to lend out, thereby increasing the overall money supply in the economy.”
6,”Fiscal deficit in the Union Budget means :”,A. the difference between current expenditure and current revenue,B. net increase in the borrowings of the Union Government from the Reserve Bank of India.,C. the sum of budgetary deficits and the net increase in internal and external borrowings.,D. None of the above
6,C,”Fiscal deficit in the Union Budget refers to the difference between the government’s total expenditure and its total revenue, excluding borrowings. It indicates the amount of money the government needs to borrow to meet its expenses when its revenues are insufficient. This includes both internal and external borrowings, making option C the correct choice.”
7,”Which one of the following is the largest component of revenue expenditure in the Union Budget 2022 - 23?”,A. Interest payments,B. Defense expenditure,C. Expenditure on healthcare,D. Subsidies
7,A,”Interest payments are a significant part of the government’s revenue expenditure and typically one of the largest expenses in the budget. In the Union Budget 2022-23, interest payments were estimated to be 43% of revenue receipts, making it the largest component of revenue expenditure.”
Reserves to import ratio: This measures how many months of imports can be covered by a
country‘s foreign exchange reserves.
Reserves to external debt ratio: This indicates the proportion of a country‘s external debt
that can be covered by its foreign exchange reserves.
Reserves to GDP ratio: This compares the size of a country‘s foreign exchange reserves
with its Gross Domestic Product.
Reserves to monetary aggregates: This compares the foreign exchange reserves of a
country with its total money supply.
= Reserves to import ratio: This measures how many months of imports can be covered by a
country‘s foreign exchange reserves.
Reserves to external debt ratio: This indicates the proportion of a country‘s external debt
that can be covered by its foreign exchange reserves.
Reserves to GDP ratio: This compares the size of a country‘s foreign exchange reserves
with its Gross Domestic Product.
Reserves to monetary aggregates: This compares the foreign exchange reserves of a
country with its total money supply.
9,”If all the people of the economy increase the proportion of income they save, the total value of savings in the economy will either decrease or remain unchanged. This phenomenon is known as:”,A. Crowdingout,B. Crowding in,C. Paradox of thrift,D. Paradox of prosperity
9,C,”The phenomenon where if all the people of the economy increase the proportion of income they save, the total value of savings in the economy will either decrease or remain unchanged is known as the Paradox of Thrift. This paradox highlights the counterintuitive relationship between individual saving behavior and overall economic activity, where what’s individually prudent may not always be collectively beneficial for the economy.”
10,”The banks are required to maintain a certain ratio between their cash in hand and total assets. This ratio is known as :”,A. Cash Reserve Ratio (CRR),B. Statutory Liquidity Ratio (SLR),C. Central Bank Reserve (CBR),D. Statutory Bank Ratio (SBR)
10,B,”The ratio between a bank’s cash in hand and total assets is known as the Statutory Liquidity Ratio (SLR). SLR is the percentage of liquid assets that banks must maintain as reserves, which includes cash, gold, and unencumbered government securities. This ratio is used to control the expansion of bank credit and ensure the liquidity and stability of the banking system.”
11,”Which of the following is/are not correct about the Mother‟s Absolute Affection Programme ?”,A. Allows all pregnant women to absolutely free and no-expense delivery in public health institutions.,B. Provides assured, comprehensive and quality antenatal care.,C. Promotes undiluted focus on breastfeeding.,D. Provides medical and nutritional care to severely acute malnourished children.
11,C,”The correct answer is C. 1, 2, and 4 only. The Mother’s Absolute Affection (MAA) Programme does not provide medical and nutritional care to severely acute malnourished children. Instead, it focuses on promoting breastfeeding and providing counseling services to support breastfeeding through health systems.”
2. MAA-Mother’s Absolute Affection
A nationwide programme launched in an attempt to bring undiluted focus on promotion of breastfeeding and provision of counselling services for supporting breastfeeding through health systems. The programme has been named ‘MAA’ to signify the support a lactating mother requires from family members and at health facilities to breastfeed successfully. The chief components of the MAA Programme are Community awareness generation, Strengthening inter personal communication through ASHA, Skilled support for breastfeeding at delivery points in public health facilities, and monitoring and award/recognition.
12,”‘Rail Vikas Limited’ is a :”,A. Maharatna CPSE,B. Navaratna CPSE,C. Miniratna I CPSE,D. Miniratna II CPSE
12,B,”Rail Vikas Nigam Limited (RVNL) is classified as a Navaratna CPSE (Central Public Sector Enterprise). Navratna status is conferred upon CPSEs that meet specific criteria related to their financial performance, autonomy, and strategic decision-making capabilities. RVNL was promoted to the Navratna category from Category-I Miniratna in recognition of its performance and contribution to the railway sector.”
13,”„Operation Flood‟ is also popularly known as”,A. the Green Revolution,B. the White Revolution,C. the Blue Revolution,D. the Yellow Revolution
13,B,”Operation Flood, a mission to increase the performance of the dairy sector, is popularly known as the White Revolution in India. It aimed at increasing milk production, providing economic sustainability to the dairy industry, and alleviating poverty among farmers. Verghese Kurien, known as the Father of the White Revolution, played a pivotal role in its implementation.”
14,”Nowadays, „non-fungible tokens‟ are talked about in the context of”,A. digital assets on a blockchain,B. operations of ‘banking correspondents’ in rural areas,C. multifactor authentication security requirement in banking transactions,D. transactions through ‘small finance banks’
14,A,”Non-fungible tokens (NFTs) are talked about in the context of digital assets on a blockchain. NFTs are unique digital assets that represent ownership or proof of authenticity of a particular item or piece of content, such as digital art, collectibles, music, or videos. Each NFT is distinct and cannot be replicated, making it non-fungible.”
15,”With reference to Indian economy, the term „bad bank‟, frequently mentioned in news, refers to”,A. an asset reconstruction company,B. an asset management company,C. a bank with huge ‘nonperforming assets’,D. a bank that has become insolvent
15,A,”The term ‘bad bank’ refers to an asset reconstruction company (ARC). A bad bank is a financial entity set up to buy Non-Performing Assets (NPAs), or Bad Loans, from banks with the aim of easing the burden on banks and facilitating the cleanup of their balance sheets.”
