[CSP] Test PT19ST11 – Economics

#1. Concessional Financing Scheme, which is sometimes in news, is generally used in the context of

(a) Domestic farm subsidies

(b) Countervailing duties

(c) Double taxation avoidance treaties

(d) Infrastructure development projects

#2. A country is said to be in a debt trap if

(a) it has to borrow to make interest payments on outstanding loans

(b) it has to abide by the conditions imposed by the International Monetary Fund

(c) it has been refused loans or aid by creditors abroad

(d) the World Bank charges a very high rate of interest on outstanding as well as new loans

#3. The terms ‘Grey List’ and ‘Black List’, which are sometimes in news, are used in the context of the operations of

(a) Multilateral Investment Guarantee Agency

(b) International Union for Conservation of Nature

(c) Interpol

(d) Financial Action Task Force

#4. Decisions in the Monetary Policy Committee of the RBI are taken

(a) unanimously

(b) by majority

(c) by majority with the RBI governor enjoying the veto power to overrule the other panel members

(d) by majority with the RBI governor having a casting vote in case of a tie

#5. The currencies that make up the Special Drawing Rights of IMF include:

1. Dollar

2. Yen

3. Euro

4. Pound Sterling

5. Renminbi (Yuan)

Select the correct answer using the codes given below.

(a) 1, 2, 3 and 4

(b) 1, 3 and 4

(c) 2, 3 and 5

(d) 1, 2, 3, 4 and 5

#6. India has been grappling with the issue of low tax-to-GDP ratio for some time. What can be the suggested measures to improve tax-to-GDP ratio?

1. To substantially cut down the expenditure on welfare programmes

2. To increase government borrowing from the international lenders

3. To rationalize the exemptions allowed under the tax laws

4. To create infrastructure to contain tax evasion

Select the correct answer using the codes given below.

(a) 1 and 2 only

(b) 2, 3 and 4 only

(c) 3 and 4 only

(d) 1, 2, 3 and 4

#7. Consider the following statements about the ‘Small Finance Banks (SFBs):

1. SBFs can take deposits but cannot perform loan-making functions

2. SBFs are being set up mainly for the growth of agriculture and Micro, Small and Medium industries

3. SFBs cannot have any foreign shareholding

Which of the above statements is/are correct?

(a) 1 and 3 only

(b) 1, 2 and 3

(c) 2 only

(d) 2 and 3 only

#8. In the context of which of the following do you sometimes find the term ‘limitation of benefit’ clause in the news?

(a) Intellectual Property Rights Agreements

(b) Civil Nuclear Cooperation Agreements

(c) Double Taxation Avoidance Agreements

(d) India-China negotiations on rare earth metals

#9. The Extended Fund Facility agreement which is sometimes in news is related to the affairs of

(a) World Bank

(b) International Monetary Fund

(c) World Economic Forum

(d) New Development Bank

#10. India is a member country of

1. African Development Bank

2. International Bank for Reconstruction and Development

3. Asian Infrastructure Investment Bank

Select the correct answer using the codes given below.

(a) 2 and 3 only

(b) 1 only

(c) 1 and 3 only

(d) 1, 2 and 3

Solutions:

Ans 1 (d):

Recently, government extended the Concessional Financing Scheme (CFS) for five years till 2023.

Ans 2 (a):

Recently, government extended the Concessional Financing Scheme (CFS) for five years till 2023.

Ans 3 (d):

Ans 4 (d):

Each member of the MPC has one vote, and in the event of an equality of votes, the Governor has a second or casting vote.

Ans 5 (d):

The Chinese RMB joined the US dollar, Euro, Japanese Yen, and British Pound Sterling in the SDR basket, effective October 1, 2016.

Ans 6 (c):

To substantially cut down the expenditure on welfare programmes and to increase government borrowing from the international lenders cannot be taken up a means to raise tax-to-GDP ratio.

Ans 7 (c):

The small finance bank shall primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

The foreign shareholding in the small finance bank would be as per the Foreign Direct Investment (FDI) policy for private sector banks as amended from time to time.

Ans 8 (c):

The LOB clause limits treaty benefits to those who meet certain conditions including those related to business, residency and investment commitments of the entity seeking benefit of a Double Taxation Avoidance Agreement (DTAA).

Ans 9 (b):

The EFF was established to provide assistance to countries: (i) experiencing serious payments imbalances because of structural impediments; or (ii) characterized by slow growth and an inherently weak balance of payments position. The EFF provides assistance in support of comprehensive programs that include policies of the scope and character required to correct structural imbalances over an extended period.

Ans 10 (d):

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Categories: CSP_GS I

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