Q. What is a key characteristic of a financial instrument?
-
A.
It can be traded in financial markets
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B.
It is always backed by physical assets
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C.
It has a fixed maturity date
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D.
It cannot be used for hedging
Solution
A financial instrument is characterized by its ability to be traded in financial markets.
Correct Answer:
A
— It can be traded in financial markets
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Q. What is the impact of high inflation on the economy?
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A.
Increases purchasing power
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B.
Reduces savings
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C.
Encourages investment
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D.
Decreases interest rates
Solution
High inflation erodes purchasing power, leading to reduced savings and increased uncertainty in the economy.
Correct Answer:
B
— Reduces savings
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Q. What is the primary purpose of biotechnology in the economy?
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A.
To enhance agricultural productivity
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B.
To reduce government regulations
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C.
To increase fossil fuel production
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D.
To promote traditional farming methods
Solution
Biotechnology primarily aims to enhance agricultural productivity through genetic modification and other techniques.
Correct Answer:
A
— To enhance agricultural productivity
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Q. Which financial instrument is considered a safe investment during economic downturns?
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A.
Stocks
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B.
Bonds
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C.
Real estate
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D.
Cryptocurrencies
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 of the following is NOT a function of commercial banks?
-
A.
Accepting deposits
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B.
Providing loans
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C.
Issuing currency
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D.
Facilitating payments
Solution
Issuing currency is a function of central banks, not commercial banks.
Correct Answer:
C
— Issuing currency
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