Q. What role does the Reserve Bank of India (RBI) play in controlling inflation?
A.
Setting fiscal policy
B.
Regulating stock markets
C.
Adjusting interest rates
D.
Controlling foreign exchange rates
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Solution
The RBI controls inflation primarily by adjusting interest rates, which influences borrowing and spending in the economy.
Correct Answer:
C
— Adjusting interest rates
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Q. What role does the Reserve Bank of India (RBI) play in the context of financial instruments related to automation?
A.
Regulating the stock market only
B.
Issuing guidelines for technology investments
C.
Controlling interest rates for automation loans
D.
Overseeing only traditional banking operations
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Solution
The RBI controls interest rates, which can affect loans for automation investments, thereby influencing the adoption of robotics in industries.
Correct Answer:
C
— Controlling interest rates for automation loans
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Q. What type of bank is primarily focused on providing microloans to low-income individuals?
A.
Commercial Bank
B.
Development Bank
C.
Microfinance Bank
D.
Investment Bank
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Solution
Microfinance banks are focused on providing microloans to low-income individuals who lack access to traditional banking.
Correct Answer:
C
— Microfinance Bank
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Q. What type of bank primarily provides financial services to low-income individuals?
A.
Commercial Bank
B.
Investment Bank
C.
Microfinance Bank
D.
Development Bank
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Solution
Microfinance banks primarily provide financial services to low-income individuals and small businesses.
Correct Answer:
C
— Microfinance Bank
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Q. What type of financial institution primarily provides microloans to low-income individuals?
A.
Commercial Bank
B.
Investment Bank
C.
Microfinance Institution
D.
Development Bank
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Solution
Microfinance institutions primarily provide microloans to low-income individuals to promote entrepreneurship.
Correct Answer:
C
— Microfinance Institution
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Q. What type of financial instrument is a certificate of deposit (CD)?
A.
Equity security
B.
Debt security
C.
Derivative
D.
Currency
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Solution
A certificate of deposit (CD) is a debt security issued by banks to raise funds from depositors.
Correct Answer:
B
— Debt security
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Q. What type of unemployment is caused by economic downturns?
A.
Frictional unemployment
B.
Structural unemployment
C.
Cyclical unemployment
D.
Seasonal unemployment
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Solution
Cyclical unemployment occurs during economic downturns when demand for goods and services decreases, leading to job losses.
Correct Answer:
C
— Cyclical unemployment
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Q. Which economic indicator is most likely to be affected by a natural disaster?
A.
Unemployment rate
B.
Consumer confidence index
C.
Gross domestic product (GDP)
D.
All of the above
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Solution
All of the above economic indicators are likely to be affected by a natural disaster, as they reflect the overall economic health and consumer sentiment.
Correct Answer:
D
— All of the above
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Q. Which financial instrument is commonly used by farmers to hedge against crop price fluctuations?
A.
Futures contracts
B.
Savings accounts
C.
Equity shares
D.
Government bonds
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Solution
Futures contracts are used by farmers to lock in prices for their crops, providing a hedge against price volatility in the market.
Correct Answer:
A
— Futures contracts
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Q. Which financial instrument is commonly used by farmers to hedge against price fluctuations?
A.
Futures contracts
B.
Savings accounts
C.
Equity shares
D.
Government bonds
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Solution
Futures contracts are financial instruments that allow farmers to lock in prices for their crops, helping them hedge against price fluctuations in the market.
Correct Answer:
A
— Futures contracts
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Q. Which financial instrument is commonly used by governments to finance budget deficits?
A.
Stocks
B.
Bonds
C.
Mutual funds
D.
Derivatives
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Solution
Governments typically issue bonds to finance budget deficits, as they are a way to borrow money from investors.
Correct Answer:
B
— Bonds
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Q. Which financial instrument is commonly used for government borrowing?
A.
Stocks
B.
Bonds
C.
Mutual funds
D.
Derivatives
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Solution
Bonds are commonly used as financial instruments for government borrowing, allowing governments to raise funds from investors.
Correct Answer:
B
— Bonds
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Q. Which financial instrument is commonly used to fund automation projects?
A.
Equity shares
B.
Government bonds
C.
Venture capital
D.
Savings accounts
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Solution
Venture capital is often used to fund automation projects, as it provides the necessary capital for startups and innovative technologies.
Correct Answer:
C
— Venture capital
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Q. Which financial instrument is commonly used to hedge against crop price fluctuations?
A.
Futures contracts
B.
Savings accounts
C.
Equity shares
D.
Government bonds
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Solution
Futures contracts are financial instruments that allow farmers to lock in prices for their crops, protecting them against price volatility in the market.
Correct Answer:
A
— Futures contracts
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Q. Which financial instrument is considered a safe investment during economic downturns?
A.
Stocks
B.
Bonds
C.
Real estate
D.
Cryptocurrencies
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Solution
Bonds, especially government bonds, are considered safer investments during economic downturns compared to stocks and other instruments.
Correct Answer:
B
— Bonds
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Q. Which financial instrument is crucial for funding small and medium enterprises (SMEs) in India?
A.
Equity shares
B.
Debentures
C.
Venture capital
D.
Government bonds
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Solution
Venture capital is crucial for funding SMEs as it provides the necessary capital for growth and innovation, contributing to inclusive growth.
Correct Answer:
C
— Venture capital
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Q. Which financial instrument is often used to fund environmental projects?
A.
Corporate bonds
B.
Green bonds
C.
Treasury bills
D.
Equity shares
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Solution
Green bonds are specifically designed to fund projects that have positive environmental impacts.
Correct Answer:
B
— Green bonds
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Q. Which financial instrument is primarily used by the RBI to control inflation?
A.
Government bonds
B.
Treasury bills
C.
Reverse repo rate
D.
Equity shares
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Solution
The reverse repo rate is used by the RBI to control inflation by absorbing excess liquidity from the banking system.
Correct Answer:
C
— Reverse repo rate
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Q. Which financial instrument is primarily used to support food security initiatives in India?
A.
Agricultural bonds
B.
Food coupons
C.
Subsidized loans
D.
Food security bonds
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Solution
Subsidized loans are often provided to farmers to enhance agricultural productivity, contributing to food security.
Correct Answer:
C
— Subsidized loans
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Q. Which financial instrument represents ownership in a company?
A.
Bond
B.
Stock
C.
Derivative
D.
Mutual fund
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Solution
Stocks represent ownership in a company, giving shareholders a claim on the company's assets and earnings.
Correct Answer:
B
— Stock
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Q. Which fiscal policy action is likely to be taken during a recession?
A.
Increase taxes
B.
Decrease government spending
C.
Increase government spending
D.
Reduce transfer payments
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Solution
During a recession, governments typically increase government spending to stimulate economic activity and boost aggregate demand.
Correct Answer:
C
— Increase government spending
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Q. Which fiscal policy action is likely to stimulate economic growth?
A.
Increasing taxes
B.
Decreasing government spending
C.
Increasing government spending
D.
Reducing public investment
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Solution
Increasing government spending is likely to stimulate economic growth by boosting demand and creating jobs.
Correct Answer:
C
— Increasing government spending
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Q. Which fiscal policy tool can be used to stimulate economic growth?
A.
Increasing taxes
B.
Decreasing government spending
C.
Increasing government spending
D.
Reducing interest rates
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Solution
Increasing government spending is a fiscal policy tool that can stimulate economic growth by boosting demand.
Correct Answer:
C
— Increasing government spending
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Q. Which fiscal policy tool is primarily used to influence economic activity?
A.
Taxation
B.
Interest rates
C.
Reserve requirements
D.
Open market operations
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Solution
Taxation is a primary fiscal policy tool used by governments to influence economic activity by adjusting tax rates and tax revenues.
Correct Answer:
A
— Taxation
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Q. Which Five-Year Plan in India focused on the removal of poverty?
A.
First Plan
B.
Fifth Plan
C.
Eighth Plan
D.
Tenth Plan
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Solution
The Fifth Five-Year Plan (1974-1979) focused on the removal of poverty and aimed at achieving self-reliance.
Correct Answer:
B
— Fifth Plan
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Q. Which government initiative aims to provide skill training to rural youth?
A.
Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
B.
National Skill Development Mission
C.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
D.
Rural Self Employment Training Institutes (RSETIs)
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Solution
The Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) aims to provide skill training to rural youth to enhance their employability.
Correct Answer:
A
— Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
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Q. Which government scheme aims to provide financial assistance to farmers for irrigation projects?
A.
Pradhan Mantri Krishi Sinchai Yojana
B.
Mahatma Gandhi National Rural Employment Guarantee Act
C.
Soil Health Card Scheme
D.
National Agricultural Market
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Solution
The Pradhan Mantri Krishi Sinchai Yojana aims to enhance irrigation facilities and provide financial assistance for irrigation projects.
Correct Answer:
A
— Pradhan Mantri Krishi Sinchai Yojana
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Q. Which government scheme focuses on providing financial assistance to small and marginal farmers?
A.
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
B.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
C.
National Rural Livelihood Mission (NRLM)
D.
Soil Health Card Scheme
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Solution
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provides direct income support to small and marginal farmers to help them meet their agricultural needs.
Correct Answer:
A
— Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)
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Q. Which institution is primarily responsible for conducting monetary policy in India?
A.
Ministry of Finance
B.
Reserve Bank of India
C.
Securities and Exchange Board of India
D.
World Bank
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Solution
The Reserve Bank of India (RBI) is primarily responsible for conducting monetary policy in India.
Correct Answer:
B
— Reserve Bank of India
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Q. Which institution is primarily responsible for implementing fiscal policy in India?
A.
Reserve Bank of India
B.
Ministry of Finance
C.
Securities and Exchange Board of India
D.
Planning Commission
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Solution
The Ministry of Finance is responsible for formulating and implementing fiscal policy in India.
Correct Answer:
B
— Ministry of Finance
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