Economy Questions

#1

With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, the Reserve Bank of India (RBI) is likely to buy government securities. 2. If the rupee is rapidly depreciating, RBI is likely to sell dollars in the market. 3. If interest rates in the USA or European Union were to fall, that is likely to induce RBI to buy dollars. Which of the statements given above are correct?

#2

Consider the following statements: In India, credit rating agencies are regulated by the Reserve Bank of India. The rating agency popularly known as ICRA is a public limited company. Brickwork Ratings is an Indian credit rating agency. Which of the statements given above are correct?

#3

With reference to the expenditure made by an organization or a company, which of the following statements is/are correct? Acquiring new technology is capital expenditures. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditures. Select the correct answer using the code given below.

#4

Which of the following activities constitute a real sector in the economy? Farmers harvesting their crops Textile mills converting raw cotton into fabrics A commercial bank lending money to a trading company A corporate body issuing Rupee Denominated Bonds overseas. Select the correct answer using the code given below.

#5

With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”? Government can reduce the coupon rates on its borrowing by way of IIBs. IIBs provide protection to the investors from uncertainty regarding inflation. The interest received as well as capital gains on IIBs are not taxable. Which of the statements given above are correct?

#6

With reference to Convertible Bonds, consider the following statements: As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct?

#7

“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following?

#8

With reference to the Indian economy, consider the following statements: An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the statements are correct?

#9

Consider the following statements: Tight monetary policy of the US Federal Reserve could lead to capital flight. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct?

#10

With reference to the Banks Board Bureau (BBB)’, which of the following statements are correct? The Governor of RBI is the Chairman of BBB. BBB recommends for the selection of heads for Public Sector Banks. BBB helps the Public Sector Banks in developing strategies and capital raising plans. Select the correct answer using the code given below.

#11

In India, which one of the following is responsible for maintaining price stability by controlling inflation?

#12

With reference to Indian economy, consider the following statements: A share of the household financial savings goes towards government borrowings. Dated securities issued at market related rates in auctions form a large component of internal debt. Which of the above statements is/are correct?