Correct Answer: B) Reserve Bank of India (RBI)
Explanation: The Reserve Bank of India (RBI) is the central banking institution in India responsible for regulating the money supply, interest rates, and monetary policy.
A) Control inflation
B) Reduce government spending
C) Increase foreign exchange reserves
D) Create employment opportunities
Correct Answer: A) Control inflation
Explanation: The primary objective of monetary policy is to control inflation by managing the supply of money and interest rates. It helps in maintaining price stability.
A) Securities and Exchange Board of India (SEBI)
B) Reserve Bank of India (RBI)
C) National Bank for Agriculture and Rural Development (NABARD)
D) Indian Banks’ Association (IBA)
Correct Answer: B) Reserve Bank of India (RBI)
Explanation: The Reserve Bank of India (RBI) is the central banking institution in India responsible for regulating the money supply, interest rates, and monetary policy.
A) Gross Domestic Product
B) General Domestic Profit
C) Gross Domestic Profit
D) General Domestic Product
Correct Answer: A) Gross Domestic Product
Explanation: GDP stands for Gross Domestic Product, which measures the total value of all goods and services produced within a country’s borders during a specific time period.
A) Classical Economics
B) Keynesian Economics
C) Austrian Economics
D) Monetarism
Correct Answer: B) Keynesian Economics
Explanation: Keynesian Economics suggests that government intervention is necessary to manage economic cycles and stabilize the economy, especially during recessions.
A) Provide long-term loans to developing countries
B) Promote international trade
C) Offer short-term financial assistance to member countries
D) Regulate global financial markets
Correct Answer: C) Offer short-term financial assistance to member countries
Explanation: The IMF provides short-term financial assistance to member countries facing balance of payments problems to help stabilize their economies.
A) Life expectancy at birth
B) Gross national income per capita
C) Education index
D) Inflation rate
Correct Answer: D) Inflation rate
Explanation: The Human Development Index (HDI) includes life expectancy at birth, gross national income per capita, and education index, but not the inflation rate.
A) A decrease in the overall price level of goods and services
B) An increase in the money supply
C) A rise in interest rates
D) A decrease in unemployment
Correct Answer: A) A decrease in the overall price level of goods and services
Explanation: Deflation refers to a decrease in the overall price level of goods and services, which can lead to reduced consumer spending and economic slowdown.
A) Consumer Price Index (CPI)
B) Unemployment Rate
C) Stock Market Index
D) Gross Domestic Product (GDP)
Correct Answer: C) Stock Market Index
Explanation: The stock market index is considered a leading economic indicator because it reflects investor sentiment and can predict future economic activity.
A) Foreign Institutional Investors
B) Federal Investment Institutions
C) Foreign Internal Investments
D) Financial Independent Institutions
Correct Answer: A) Foreign Institutional Investors
Explanation: FIIs stands for Foreign Institutional Investors, which are entities like mutual funds, pension funds, and other large institutions that invest in financial markets outside their home country.
A) Income Tax
B) Wealth Tax
C) Value Added Tax
D) Corporate Tax
Correct Answer: C) Value Added Tax
Explanation: VAT is a tax levied on the value added to goods and services at each stage of production or distribution.
A) Total national debt divided by the population
B) Total national income divided by the population
C) Total gross domestic product divided by the population
D) Total exports divided by the population
Correct Answer: C) Total gross domestic product divided by the population
Explanation: GDP per capita measures the total GDP divided by the population, providing an average economic output per person.
A) Adjusting interest rates
B) Changing tax rates
C) Regulating money supply
D) Controlling inflation
Correct Answer: B) Changing tax rates
Explanation: Fiscal policy involves government changes in tax rates and public spending to influence the economy.
A) Nominal GDP
B) Real GDP
C) Gross National Product
D) Net National Income
Correct Answer: B) Real GDP
Explanation: Real GDP is adjusted for inflation and provides a more accurate measure of economic output compared to nominal GDP.
A) Increasing interest rates to control inflation
B) Reducing government spending
C) Central banks buying assets to increase money supply
D) Cutting taxes to stimulate economic growth
Correct Answer: C) Central banks buying assets to increase money supply
Explanation: Quantitative easing involves central banks purchasing assets, such as government bonds, to increase the money supply and encourage lending and investment.
A) World Bank
B) International Monetary Fund (IMF)
C) United Nations
D) Bank for International Settlements (BIS)
Correct Answer: B) International Monetary Fund (IMF)
Explanation: The IMF publishes the World Economic Outlook report, which provides analysis and projections of the global economy.
A) Frictional Unemployment
B) Structural Unemployment
C) Cyclical Unemployment
D) Seasonal Unemployment
Correct Answer: D) Seasonal Unemployment
Explanation: Seasonal unemployment is a type of unemployment but is generally considered a temporary phase rather than a distinct economic condition like frictional, structural, and cyclical unemployment.
A) The responsiveness of demand or supply to changes in price
B) The total value of production
C) The rate of inflation
D) The total amount of government spending
Correct Answer: A) The responsiveness of demand or supply to changes in price
Explanation: Elasticity measures how much the quantity demanded or supplied of a good changes in response to a change in price.
A) Economic growth
B) Income inequality
C) Inflation rate
D) Employment rate
Correct Answer: B) Income inequality
Explanation: The Gini Coefficient measures income inequality within a country, with 0 representing perfect equality and 1 representing maximum inequality.
A) Import duties
B) Export taxes
C) Quotas
D) Tariffs
Correct Answer: C) Quotas
Explanation: Quotas are non-tariff barriers that limit the quantity of goods that can be imported or exported, affecting trade flows without directly imposing tariffs.
A) Public Private Partnership
B) Purchasing Power Parity
C) Primary Payment Process
D) Public Policy Program
Correct Answer: B) Purchasing Power Parity
Explanation: Purchasing Power Parity (PPP) is an economic theory that compares different countries’ currencies through a market basket of goods approach to determine the relative value.
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