RBI Grade B Economic and Social Issues (ESI) Questions | Test-10

Correct Answer:  D. stimulant to industrial production

Explanation:  Due to LPG policy is Indian economy has definitely got into a growth momentum the process of growth has not only exhilarated but also become diversifieD. It is going to these policies that IT industry in India has achieved global recognition. LPG policies have a great stimulant to industrial production in the Indian economy.

Correct Answer:  A. 1 and 2

Explanation:  The International Financial Services Centers Authority (IFSCA) has become an associate member of the International Organization for Securities Commissions (IOSCO). The first International Financial Services Center (IFSC) in India has been set up at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar. It caters to customers outside the jurisdiction of the domestic economy. Such centers allow finance to flow across borders, trading in financial products and services.

Correct Answer – B. Mark up theory

Explanation: Mark-up theory of inflation was proposed by Prof Gardner Ackley. According to him, inflation cannot occur alone by demand and cost factors, but it is the cumulative effect of demand-pull and cost-push activities. Demand-pull inflation refers to the inflation that occurs due to excess of aggregate demand, which further results in the increases in price level. The increase in prices levels stimulates production, but increases demand for factors of production. Consequently, the cost and price both increases. In some cases, wages also increase without rise in the excess demand of products. This results in fall in supply at increased level of prices as to compensate the increase in wages with the prices of products. The shortage of products in the market would result in the further increase of prices. Therefore, Prof. Gardner has provided a model of mark-up inflation in which both the factors, demand cost, are determined. Increase in demand results in the increase of prices of products as the customers spend more on products.

Correct Answer:  E. All of these

Explanation:  Excess of production in two main food-grains (wheat and rice) and shortages in most others prevail side by side. Major commercial crops like cotton, jute, tea and sugarcane are also almost untouched by the Green Revolution. Green Revolution technology has given birth to growing disparities in economic development at interred and intra regional levels. It has so far affected only 40 per cent of the total cropped area and 60 per cent is still untouched by it. Big farmer having 10 hectares or more land, who is benefited the most from Green Revolution because they have the financial resources to purchase farm implements, better seeds, fertilizers and can arrange for regular supply of irrigation water to the crops. As against this, the small and marginal farmers do not have the financial resources to purchase these farm inputs and are deprived of the benefits of Green Revolution Technology. Farm mechanization under Green Revolution has created widespread unemployment among agricultural laborers in the rural areas. The worst hits are the poor and the landless people.

Correct Answer – A. Personal income – Direct taxes paid by households and miscellaneous fees, fines, etc.

Explanation: Disposable income, also known as disposable personal income (DPI), is the amount of money that an individual or household has to spend or save after income taxes have been deducted.At the macro level, disposable personal income is closely monitored as one of the key economic indicators used to gauge the overall state of the economy.

Correct Answer:  A. Start-up India Showcase

Explanation:  Startup India Showcase is an online discovery platform for the most promising startups of the country. As per a recent data from the Union Commerce Ministry, as many as 104 startups from different sectors have been registered on the Startup India Showcase platform. In the platform, the promising start-ups, chosen through various programs, are exhibited in the form of virtual profiles.

Correct Answer:  B. Foreign Currency assets

Explanation:  As per the RBI data, India’s foreign exchange reserves rose by USD 835 million to touch a record high of USD 612.73 billion in the week ended July 16, 2021. The foreign currency assets (FCA) is the major component of the overall reserves. It rose by USD 463 million to USD 568.748 billion in the week. Gold reserves were up by USD 377 million and the special drawing rights (SDRs) with the International Monetary Fund (IMF) were up by USD 1 million. With this, India became the fourth largest Forex holder.

Correct Answer – C. only 3

Explanation: Statement 1 is incorrect as In WPI basket, Services are not included. Statement 2 is incorrect as In India, the Office of Economic Advisor (OEA), Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry calculates the WPI. Statement 3 is correct as Under WPI, Manufactured Products have maximum weightage.

Correct Answer:  A. Factoring

Explanation:  Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount. The Lok Sabha recently passed the Factoring Regulation (Amendment) Bill, 202. The bill seeks to permit non-banking finance companies (NBFC) other than those whose principal business is factoring, to discount invoices on TReDS platform. This helps MSMEs to tackle the problem of delayed payments.

Correct Answer – C. Strategic Disinvestment of PSEs and minimum presence of existing companies under government control in strategic sectors

Explanation:The new public sector enterprises policy envisages that the strategic sectors have limited number of players restricting it to maximum four public sector enterprises of the holding nature. New Public Sector Enterprise Policy and Asset Monetisation Strategy by the Government reaffirm its commitment towards privatization and strategic disinvestment of Public Sector Enterprises. The privatisation of Air India has been particularly important, not only in terms of garnering disinvestment proceeds but also for boosting the privatisation drive.