The Daily Current Affairs Quiz questions are based on various national and regional newspapers including government news sources.
The questions are framed on happenings around you to enhance your competitiveness for news based concepts and facts
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Question 1 of 5
1. Question
Consider the following statements:
1. The GDP deflator measures the prices of all goods and services produced, unlike the CPI which measures the prices of only the goods and services bought by consumers.
2. The GDP deflator includes only domestically produced goods.
Choose the correct answer using the codes given below:
Correct
Solution c)
• The GDP deflator measures the prices of all goods and services produced, whereas the CPI or RPI measures the prices of only the goods and services bought by consumers. Thus, an increase in the price of goods bought by firms or the government will show up in the GDP deflator but not in the CPI or RPI.
• The CPI or RPI assigns fixed weights to the prices of different goods, whereas the GDP deflator assigns changing weights. In other words, the CPI or RPI is computed using a fixed basket of goods, whereas the GDP deflator allows the basket of goods to change over time as the composition of GDP changes.
• The GDP deflator includes only those goods produced domestically. Imported goods are not part of GDP and do not show up in the GDP deflator. For example, an increase in the price of Toyota made in Japan and sold in the U.K. affects the CPI or RPI, because the Toyota is bought by consumers in the U.K., but it does not affect the GDP deflator.
Incorrect
Solution c)
• The GDP deflator measures the prices of all goods and services produced, whereas the CPI or RPI measures the prices of only the goods and services bought by consumers. Thus, an increase in the price of goods bought by firms or the government will show up in the GDP deflator but not in the CPI or RPI.
• The CPI or RPI assigns fixed weights to the prices of different goods, whereas the GDP deflator assigns changing weights. In other words, the CPI or RPI is computed using a fixed basket of goods, whereas the GDP deflator allows the basket of goods to change over time as the composition of GDP changes.
• The GDP deflator includes only those goods produced domestically. Imported goods are not part of GDP and do not show up in the GDP deflator. For example, an increase in the price of Toyota made in Japan and sold in the U.K. affects the CPI or RPI, because the Toyota is bought by consumers in the U.K., but it does not affect the GDP deflator.
Question 2 of 5
2. Question
Poverty has many facets and is looked through various social Indicators. Consider the following statements in this regard:
1. Social Exclusion describes the greater probability of being more adversely affected than other people.
2. Vulnerability is a process through which individuals or groups are not able to access facilities, benefits and opportunities that others enjoy.
Which of the statements given above is/are correct?
Correct
Answer: d)
• Vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs. Social Exclusion is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others (their “betters”) enjoy.
Incorrect
Answer: d)
• Vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs. Social Exclusion is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others (their “betters”) enjoy.
Question 3 of 5
3. Question
Economy of a country is classified into various sectors based on different types of economic activity undertaken in each. Consider the following statements related to some of them.
1. All Agricultural activities are included in Primary sector
2. All Industrial activities are included in secondary sector.
3. Service sector includes only those activities that help in production of goods.
Select the incorrect statements using codes given below.
Correct
Answer: c)
• Mining is a primary sector Industrial process. Service sector also includes some essential services that may not directly help in the production of goods. For example, we require teachers, doctors, and those who provide personal services such as washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works.
Incorrect
Answer: c)
• Mining is a primary sector Industrial process. Service sector also includes some essential services that may not directly help in the production of goods. For example, we require teachers, doctors, and those who provide personal services such as washermen, barbers, cobblers, lawyers, and people to do administrative and accounting works.
Question 4 of 5
4. Question
An important form in which people hold money is deposits with banks. Consider the following statements related to this.
1. Since the deposits in the bank accounts can be withdrawn anytime, these deposits are called fixed deposits.
2. Banks mediate between those who have surplus funds and those who are in need of these funds.
3. Credit refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment.
Select the correct statements using the code below.
Correct
Answer: c)
• Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits.
Incorrect
Answer: c)
• Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits.
Question 5 of 5
5. Question
The price of government securities is influenced by which of the following?
(i) Repo rate
(ii) US Federal Bank benchmark interest rate
(iii) Liquidity in the market
Select the correct answer using the code given below:
Correct
Answer: d)
• Repo rate acts as benchmark interest rate in the economy and when it moves up/down then the market interest rate also moves up/down impacting G-Sec prices.
• When US Federal Bank increases their interest rate then a lot of FPI debt investors in India sell their investments and return to US in search of better return and this leads to decline in G-Sec (bond) prices in India.
• If the liquidity in the economy is surplus, the interest rate comes down in the economy resulting in higher bond prices. And if there is liquidity crunch then it moves the interest rate up resulting in decline in bond prices or G-sec prices.
Incorrect
Answer: d)
• Repo rate acts as benchmark interest rate in the economy and when it moves up/down then the market interest rate also moves up/down impacting G-Sec prices.
• When US Federal Bank increases their interest rate then a lot of FPI debt investors in India sell their investments and return to US in search of better return and this leads to decline in G-Sec (bond) prices in India.
• If the liquidity in the economy is surplus, the interest rate comes down in the economy resulting in higher bond prices. And if there is liquidity crunch then it moves the interest rate up resulting in decline in bond prices or G-sec prices.
