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Generate QuizEconomics – GK Questions
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The RBI's regulatory framework for identifying and supervising weak banks is commonly known as the ___ framework.
- first
- PCA (or Prompt Corrective Action)
- 40
- Green
Answer: PCA (or Prompt Corrective Action)
The Prompt Corrective Action (PCA) framework is triggered when banks breach certain regulatory thresholds like high NPAs, low capital adequacy, or negative return on assets. It imposes mandatory and non-mandatory restrictions on the bank to restore its financial health.
The Insolvency and Bankruptcy Code (IBC), which provides a time-bound process for resolving insolvency, was enacted in which year?
- 2014
- 2015
- 2016
- 2018
Answer: 2016
The IBC was passed in 2016 to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals. It shifted the legal framework from a 'debtor-in-possession' to a 'creditor-in-control' regime.
The SARFAESI Act, 2002 allows banks to auction secured assets without the intervention of a court to recover non-performing assets (NPAs).
- True
- False
Answer: True
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act empowers banks and financial institutions to enforce their security interest directly. This bypasses the lengthy judicial process, enabling faster recovery of bad loans from defaulting borrowers.
The Standing Deposit Facility (SDF) rate serves as the floor of the RBI's liquidity adjustment corridor and is set ___ the Repo Rate.
- below
- Leverage
- Skewflation
- gig
Answer: below
Introduced to manage excess liquidity, the SDF allows banks to park surplus funds with the RBI without providing collateral. It is usually set 25 basis points below the Repo Rate, establishing the lower bound of the monetary policy operating corridor.
The Marginal Standing Facility (MSF) rate is generally kept ___ the Repo Rate.
- Equal to
- Lower than
- Higher than
- Unrelated to
Answer: Higher than
The MSF is a penal rate at which banks can borrow overnight funds from the RBI against their SLR portfolio when inter-bank liquidity dries up completely. It is typically kept 25 basis points (0.25%) higher than the Repo Rate to discourage routine borrowing.
According to ___ Law, as a family's income increases, the proportion of its income spent on food decreases, even if the absolute expenditure on food rises.
- bracket creep (or fiscal drag)
- Engel's
- Vote on Account
- not (or never)
Answer: Engel's
Engel's Law is an observation in economics stating that the proportion of income spent on food is inversely related to income levels. This implies that lower-income families spend a much larger fraction of their earnings on basic sustenance compared to wealthier families.
If the Lorenz curve is perfectly straight and diagonal, it indicates high income inequality in the economy.
- True
- False
Answer: False
The line of perfect equality is a 45-degree diagonal line on the Lorenz curve graph. If the actual Lorenz curve perfectly overlaps this diagonal line, it means income is distributed absolutely equally among the population. The further the curve bows away from the diagonal, the higher the inequality.
A Gini coefficient of '0' indicates:
- Perfect inequality
- Perfect equality
- High inflation
- Zero unemployment
Answer: Perfect equality
The Gini coefficient measures the distribution of income or wealth within a population, ranging from 0 to 1. A value of 0 represents perfect equality (everyone has the exact same income), while a value of 1 represents perfect inequality (one person holds all the income).
The Global Multidimensional Poverty Index (MPI) is published jointly by the UNDP and the ___.
- anticommons
- Veblen
- OPHI
- India Debt Resolution Company Ltd (IDRCL)
Answer: OPHI
The Oxford Poverty and Human Development Initiative (OPHI) collaborates with the UNDP to release the MPI. Unlike traditional income-based measures, the MPI evaluates deprivation across three dimensions: health, education, and standard of living.
According to the Tendulkar Committee report, what was the estimated rural poverty line (per capita per month) for the year 2011-12?
- Rs. 673
- Rs. 816
- Rs. 1000
- Rs. 32
Answer: Rs. 816
The Tendulkar Committee shifted the poverty estimation away from calorie consumption to a broader basket including health and education. For 2011-12, it set the rural poverty line at Rs. 816 per month and the urban poverty line at Rs. 1000 per month.
The Periodic Labour Force Survey (PLFS), which replaced the quinquennial employment surveys, is conducted by which organization?
- NITI Aayog
- National Statistical Office (NSO)
- Reserve Bank of India
- Ministry of Labour and Employment
Answer: National Statistical Office (NSO)
The NSO, operating under the Ministry of Statistics and Programme Implementation (MoSPI), launched the PLFS in 2017. It was designed to provide more frequent and reliable estimates of labor force indicators like unemployment and labor force participation rates in both rural and urban areas.
The short-term unemployment that occurs when workers are transitioning between jobs or searching for their first job is known as ___ unemployment.
- drives out
- social
- milk
- frictional
Answer: frictional
Frictional unemployment is a natural and inevitable part of any dynamic labor market. It represents the time lag between workers leaving one job and finding another that better matches their skills and salary expectations.
Structural unemployment is primarily caused by a mismatch between the skills workers possess and the skills demanded by employers.
- True
- False
Answer: True
Structural unemployment arises due to fundamental shifts in the economy, such as technological advancements or changes in consumer demand, which render certain skills obsolete. It is a long-term issue that often requires retraining and education to resolve.
In the case of 'disguised unemployment', the marginal productivity of labor is:
- Highly positive
- Zero or negative
- Equal to average productivity
- Infinite
Answer: Zero or negative
Disguised unemployment occurs when more people are employed than actually needed for a job, commonly seen in the Indian agricultural sector. If these extra workers are removed, the total output remains unaffected, meaning their marginal productivity is zero.
Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) provides a health insurance cover of up to Rs. ___ per family per year for secondary and tertiary care hospitalization.
- Okun's
- 5 lakh
- decrease (or reduce / lower)
- less
Answer: 5 lakh
AB-PMJAY is the world's largest fully government-funded health assurance scheme. It provides a cover of Rs. 5 lakh per family per year on a family floater basis, targeting the bottom 40% of the Indian population identified through the SECC 2011 database.
Under the PM-KISAN scheme, what is the total annual income support provided to eligible farmer families?
- Rs. 2,000
- Rs. 4,000
- Rs. 6,000
- Rs. 10,000
Answer: Rs. 6,000
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provides an annual financial benefit of Rs. 6,000 to small and marginal farmer families. This amount is transferred directly into their bank accounts in three equal installments of Rs. 2,000 every four months.
What is the primary purpose of maintaining a 'Buffer Stock' of food grains by the government?
- To export to foreign countries
- To stabilize market prices and ensure food security
- To provide free food to all citizens
- To generate revenue for the FCI
Answer: To stabilize market prices and ensure food security
Buffer stocks are maintained to intervene in the market during times of shortage or surplus. By releasing stocks during scarcity, the government prevents price spikes, and by procuring during bumper harvests, it prevents price crashes, thereby protecting both consumers and farmers.
The Food Corporation of India (FCI) was established in the year ___ under the Food Corporations Act, 1964.
- 1965
- countervailing
- Mobile
- Engel's
Answer: 1965
FCI was set up in 1965 with the primary objective of safeguarding food security and ensuring price stability in the country. It is responsible for the procurement, maintenance, and distribution of food grains across India through the Public Distribution System (PDS).
Minimum Support Price (MSP) is a legally enforceable constitutional right for farmers in India.
- True
- False
Answer: False
MSP is an administrative policy decision taken by the Government of India based on the recommendations of the CACP. It does not have statutory or constitutional backing, meaning farmers cannot legally force the government or private buyers to purchase their produce at the announced MSP.
Under the MGNREGA scheme, what is the minimum mandated percentage of workdays that must be generated for women?
- 25%
- 33%
- 50%
- No specific reservation
Answer: 33%
The Mahatma Gandhi National Rural Employment Guarantee Act legally mandates that at least one-third (33%) of the total beneficiaries or person-days generated under the scheme must be women. This provision is designed to ensure female participation in the rural workforce and promote grassroots economic empowerment.