Source: Crash Course 2023

Eco Survey

1. Which one of the following statements is incorrect?

1. Internal debt of GOI has steadily increased in the last 5 years.
2. Capital expenditure as a percentage of GDP has steadily increased in the last 5 years.
3. In FY23, Corporate tax has the highest weightage in Gross Tax Revenue.
4. None of the above

Source: Crash Course (Quiz) 2023

2. Which of the following could lead to inflation in the Indian economy?

1. Declining global inflation
2. Hike in interest rates in the economy
3. Decline in the value of money

Select the correct answer using the code given below.

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Source: Crash Course (Quiz) 2023

3. Which one of the following statements is correct?

1. Debenture holders have the right to vote.
2. Debentures carry a charge on the company’s assets. 
3. Debentures are generally transferable and debenture holders can sell them on stock exchanges at any price.
4. A debenture can be redeemed at any period.

Source: Eco Survey 2023

4. Arrange the following sectors in increasing order of their share in FDI inflows?

1. Computer software and Hardware
2. Trading
3. Drugs and Pharma
4. Automobile 

Select the correct code:

1. 3-4-1-2
2. 4-3-1-2
3. 4-3-2-1
4. 3-4-2-1

Source: Crash Course 2023

5. With reference the to Sovereign Gold Bond Scheme, consider the following statements:

1. The RBI will issue Sovereign Gold Bonds on behalf of the Government of India.
2. The motive of the scheme was to increase the demand for physical gold.
3. The bonds are restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts universities and charitable institutions.

Which of the statements given above is/are correct? 

1. 1 only
2. 1 and 3 only
3. 2 and 3 only  
4. 1, 2 and 3

Answers with Explanations

Source: Crash Course 2023

Eco Survey

1. Which one of the following statements is incorrect?

1. Internal debt of GOI has steadily increased in the last 5 years.
2. Capital expenditure as a percentage of GDP has steadily increased in the last 5 years.
3. In FY23, Corporate tax has the highest weightage in Gross Tax Revenue.
4. None of the above

Answer: 3

Explanation

Fiscal Developments: Revenue Relish 

Source: Crash Course (Quiz) 2023

2. Which of the following could lead to inflation in the Indian economy?

1. Declining global inflation
2. Hike in interest rates in the economy
3. Decline in the value of money

Select the correct answer using the code given below.

1. 1 and 2 only
2. 2 and 3 only
3. 1 and 3 only
4. 1, 2 and 3

Answer: 2

Explanation

• Inflation is the rate at which prices increase over a given period. Typically, in India, the inflation rate is calculated on a year-on-year basis. 
• In other words, if the inflation rate for a particular month is 10 percent, it means that the prices in that month were 10 percent more than the prices in the same month a year earlier.
• When prices increase globally, it will lead to higher imported inflation. In other words, everything that India and Indians import will become costlier leading to an increase in inflation. 
• In general, when interest rates are low, the economy grows, and inflation increases. Conversely, when interest rates are high, the economy slows and inflation decreases. A country’s central bank typically hikes the interest rates in the economy to contain inflation. 
• By doing so, it incentivises people to spend less and save more because saving becomes more profitable as interest rates go up. As more and more people choose to save, money is sucked out of the market and the inflation rate moderates.
• A devaluation of currency leads to a decline in the value of a currency making exports more competitive and imports are more expensive. 
• Generally, a devaluation is likely to contribute to inflationary pressures because of higher import prices and rising demand for exports.

Source: Crash Course (Quiz) 2023

3. Which one of the following statements is correct?

1. Debenture holders have the right to vote.
2. Debentures carry a charge on the company’s assets. 
3. Debentures are generally transferable and debenture holders can sell them on stock exchanges at any price.
4. A debenture can be redeemed at any period.

Answer: 3

Explanation

• Debentures are debt instruments used by companies and the government to issue loans. 
• Debentures are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business. 

Features of Debentures: 

• A debenture is redeemed after a fixed period. 
• Debentures may be either secured or unsecured. 
• Debenture holders do not have any voting rights.
• The interest on debentures is always payable at a fixed rate. Further, the company has to pay interest regardless of whether it makes profits or not.
• The company may either repay the debt or even convert the debenture into shares or other debentures.
• Debentures may or may not carry a charge on the company’s assets.
• Debentures are generally transferable. Debenture-holders can sell them on stock exchanges at any price.

Source: Eco Survey 2023

4. Arrange the following sectors in increasing order of their share in FDI inflows?

1. Computer software and Hardware
2. Trading
3. Drugs and Pharma
4. Automobile 

Select the correct code:

1. 3-4-1-2
2. 4-3-1-2
3. 4-3-2-1
4. 3-4-2-1

Answer: 4

Explanation 

Source: Crash Course 2023

5. With reference the to Sovereign Gold Bond Scheme, consider the following statements:

1. The RBI will issue Sovereign Gold Bonds on behalf of the Government of India.
2. The motive of the scheme was to increase the demand for physical gold.
3. The bonds are restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts universities and charitable institutions.

Which of the statements given above is/are correct? 

1. 1 only
2. 1 and 3 only
3. 2 and 3 only  
4. 1, 2 and 3

Answer: 2

Explanation

• The Gold Bonds are issued as Government of India Stock under the Government Securities (GS) Act, 2006.
• Statement 1 is correct: These are issued by the Reserve Bank of India (RBI) on behalf of the Government of India.
• Bonds are sold through Commercial banks, Stock Holding Corporation of India Limited (SHCIL), designated post offices and recognised stock exchanges viz., National Stock Exchange of India Limited and Bombay Stock Exchange, either directly or through agents.
• Statement 2 is not correct: The SGB scheme was launched in November 2015 to reduce the demand for physical gold and shift a part of the domestic savings – used for the purchase of gold – into financial saving
• Statement 3 is correct: The bonds are restricted for sale to resident individuals, Hindu Undivided Families (HUFs), trusts, universities and charitable institutions.
• Bonds can be used as collateral for loans.
• The capital gains tax arising on redemption of SGB to an individual has been exempted.
  • Redemption is the act of an issuer repurchasing a bond at or before maturity.

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