Correct Answer: A) Current prices
Explanation: Nominal GDP is an assessment of economic production in an economy that includes current prices in its calculation, in contrast to real GDP that is adjusted for inflation.
A) Trading of old stocks
B) Issuance of new stock shares
C) Selling of government securities
D) Buying of defaulted loans
Correct Answer: B) Issuance of new stock shares
Explanation: The primary market is the part of the capital market that deals with the issuance and sale of equity-backed securities to investors directly by the issuer. It is also known as the new issues market.
A) Current prices
B) Constant prices
C) Fixed prices
D) Estimated prices
Correct Answer: A) Current prices
Explanation: Nominal GDP is an assessment of economic production in an economy that includes current prices in its calculation, in contrast to real GDP that is adjusted for inflation.
A) Its shares are traded on the stock market
B) It cannot issue debentures
C) It is managed by a single director
D) It does not allow public to buy its shares
Correct Answer: A) Its shares are traded on the stock market
Explanation: A public limited company is a company whose securities are traded on a stock exchange and can be bought and sold by anyone.
A) A decrease in inflation
B) An increase in consumption
C) An increase in the production cost of goods
D) A decrease in the export of goods
Correct Answer: C) An increase in the production cost of goods
Explanation: An increase in the General Sales Tax will lead to higher production costs for manufacturers and retailers, which can then lead to higher prices for consumers.
A) Repo Rate
B) Reverse Repo Rate
C) Bank Rate
D) Marginal Standing Facility Rate
Correct Answer: D) Marginal Standing Facility Rate
Explanation: The Marginal Standing Facility (MSF) rate is the rate at which banks can borrow overnight funds from the Reserve Bank of India against approved government securities.
A) 1988
B) 1991
C) 1992
D) 1995
Correct Answer: A) 1988
Explanation: SEBI was established in 1988 to regulate the securities market and protect the interests of investors in securities.
A) Nominal GDP
B) Real GDP
C) Gross National Product (GNP)
D) Net National Product (NNP)
Correct Answer: B) Real GDP
Explanation: Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year.
A) RBI
B) SEBI
C) IRDAI
D) PFRDA
Correct Answer: A) RBI
Explanation: Non-Banking Financial Companies (NBFCs) are regulated by the Reserve Bank of India, ensuring they provide financial services according to the norms.
A) Commercial Banks
B) Reserve Bank of India
C) Securities and Exchange Board of India
D) Ministry of Finance
Correct Answer: B) Reserve Bank of India
Explanation: The Reserve Bank of India issues Treasury Bills on behalf of the Government of India to manage short-term liquidity.
A) 1986
B) 1992
C) 2001
D) 2010
Correct Answer: A) 1986
Explanation: The Consumer Protection Act, which provides a way of redressal for the grievances of consumers, was enacted in India in 1986.
A) Higher inflation
B) Higher interest rates
C) Political instability
D) A trade deficit
Correct Answer: B) Higher interest rates
Explanation: Higher interest rates provide higher returns on investments denominated in that currency, hence increasing its value compared to other currencies.
A) General Securities
B) Government Securities
C) Graded Securities
D) Guaranteed Securities
Correct Answer: B) Government Securities
Explanation: In India, G-Secs, short for Government Securities, are debt instruments issued by the government to borrow money.
A) Long-Term Valuation
B) Legal Tender Value
C) Lease to Value
D) Loan to Value
Correct Answer: D) Loan to Value
Explanation: In mortgage banking, LTV or Loan to Value ratio is an assessment used by lenders to determine the risk of issuing a mortgage to a borrower, measured by dividing the amount of the mortgage by the value of the property.
A) Liberalism
B) Protectionism
C) Capitalism
D) Globalism
Correct Answer: B) Protectionism
Explanation: Protectionism refers to government actions and policies that restrict international trade to help domestic industries from foreign competition.
A) Treasury Bill
B) Commercial Paper
C) Corporate Bond
D) Certificate of Deposit
Correct Answer: C) Corporate Bond
Explanation: Corporate bonds are long-term financial securities issued by companies to raise funds directly from the capital market.
A) Shortage
B) Surplus
C) Equilibrium
D) Stagnation
Correct Answer: A) Shortage
Explanation: A market shortage occurs when demand exceeds supply – that is, when the price is too low to equate the quantity supplied with the quantity demanded. This situation typically causes a rise in price.
A) Total expenditure equals total revenue
B) Total expenditure exceeds total revenue
C) Total revenue exceeds total expenditure
D) Government debts are fully repaid
Correct Answer: B) Total expenditure exceeds total revenue
Explanation: Fiscal deficit is an economic phenomenon that occurs when the government’s total expenditure surpasses its total revenue (excluding money from borrowings).
A) Consumer Price Index (CPI)
B) Wholesale Price Index (WPI)
C) Producer Price Index (PPI)
D) Retail Price Index (RPI)
Correct Answer: A) Consumer Price Index (CPI)
Explanation: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
A) Stock prices
B) Wage levels
C) Interest rates
D) Export tariffs
Correct Answer: C) Interest rates
Explanation: The Repo Rate is the rate at which the central bank of a country (RBI in India) lends money to commercial banks in the event of any shortfall of funds, influencing the interest rates in the economy.
A) Fiscal policy
B) Trade policy
C) Monetary policy
D) Budgetary policy
Correct Answer: C) Monetary policy
Explanation: Monetary policy involves controlling the money supply and interest rates to influence economic activity.
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