IASbaba's Daily Static Quiz
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DAILY STATIC QUIZ (PYQs)
It will cover PYQs all the topics of static subjects – Polity, History, Geography, Economics, Environment and Science and technology.
Daily 5 questions (Monday to Saturday) will be posted from static topics (PYQs)
The questions will be in the quiz format so you will be able to answer them directly on the portal.
Schedule
- Week 1 – Polity
- Week 2 – Economics
- Week 3 – History and Art & Culture
- Week 4 – Geography
- Week 5 – Environment and Science & Technology
Same cycle will be repeated from Week 6.
Make the best use of the initiative. All the best!
To Know More about Ace the Prelims (ATP) 2021 – CLICK HERE
Important Note:
- Don’t forget to post your marks in the comment section. Also, let us know if you enjoyed today’s test 🙂
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Question 1 of 5
1. Question
Which of the following constitute Capital Account?
- Foreign Loans
- Foreign Direct Investment
- Private Remittances
- Portfolio Investment
Select the correct answer using the codes given below:
Correct
Solution (b)
Capital account refers to the record of all the transactions of the capital inflows and capital outflows which affect a country’s foreign assets and liabilities. It deals with all the international capital trade transactions between the residents of one nation with other.
Components of capital account
- Borrowing and lendings from foreign countries
- Investments to and from the foreign countries
- Foreign direct investment (FDI)
- Foreign portfolio investment (FPI)
- Changes in the Foreign Exchange Reserves
Private Remittances forms a part of current account and not capital account
Incorrect
Solution (b)
Capital account refers to the record of all the transactions of the capital inflows and capital outflows which affect a country’s foreign assets and liabilities. It deals with all the international capital trade transactions between the residents of one nation with other.
Components of capital account
- Borrowing and lendings from foreign countries
- Investments to and from the foreign countries
- Foreign direct investment (FDI)
- Foreign portfolio investment (FPI)
- Changes in the Foreign Exchange Reserves
Private Remittances forms a part of current account and not capital account
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Question 2 of 5
2. Question
Consider the following statements:
- Inflation benefits the debtors.
- Inflation benefits the bond-holders.
Which of the statements given above is/are correct?
Correct
Solution (a)
- Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation.
- Inflation favors the borrowers and adversely affects the lenders (bond investors). Same is the case with bonds.
Incorrect
Solution (a)
- Inflation redistributes wealth from creditors to debtors i.e. lenders suffer and borrowers benefit out of inflation.
- Inflation favors the borrowers and adversely affects the lenders (bond investors). Same is the case with bonds.
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Question 3 of 5
3. Question
Disguised unemployment generally means
Correct
Solution (c)
Disguised unemployment exists when part of the labor force is either left without work or is working in a redundant manner such that worker productivity is essentially zero. It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.
Incorrect
Solution (c)
Disguised unemployment exists when part of the labor force is either left without work or is working in a redundant manner such that worker productivity is essentially zero. It is unemployment that does not affect aggregate output. An economy demonstrates disguised unemployment when productivity is low and too many workers are filling too few jobs.
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Question 4 of 5
4. Question
Consider the following liquid assets:
- Demand deposits with the banks
- Time deposits with the banks
- Savings deposits with the banks
- Currency
The correct sequence of these assets in the decreasing order of liquidity is
Correct
Solution (d)
- Currency is most liquid, because we can use it as and when we want.
- Next will come demand liabilities, as they have to be cleared when demanded.
- Next savings
- Time deposit with bank are least liquid compared to savings/demand deposit with banks and currency.
Incorrect
Solution (d)
- Currency is most liquid, because we can use it as and when we want.
- Next will come demand liabilities, as they have to be cleared when demanded.
- Next savings
- Time deposit with bank are least liquid compared to savings/demand deposit with banks and currency.
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Question 5 of 5
5. Question
In the context of Indian economy, ‘Open Market Operations’ refers to
Correct
Solution (c)
Open market operations (OMO) refers to a central bank buying or selling short-term treasurys and other securities in the open market in order to influence the money supply, thus influencing short term interest rates.
- Buying securities adds money to the system, making loans easier to obtain and interest rates decline.
- Selling securities from the central bank’s balance sheet removes money from the system, making loans more expensive and increasing rates.
Incorrect
Solution (c)
Open market operations (OMO) refers to a central bank buying or selling short-term treasurys and other securities in the open market in order to influence the money supply, thus influencing short term interest rates.
- Buying securities adds money to the system, making loans easier to obtain and interest rates decline.
- Selling securities from the central bank’s balance sheet removes money from the system, making loans more expensive and increasing rates.
