May 21, 2020 – Daily Quiz

1. Under which of the following circumstances may ‘capital gains’ arise?

  1. When there is an increase in the sales of a product
  2. When there is a. natural increase in the value of the property owned
  3. When you purchase a painting and there is a growth in its value due to increase in its popularity

Select the correct answer using the codes given below :

(a) 1 only

(b) 2 and 3 only

(c) 2 only

(d) 1, 2 and 3

 

2. In terms of economy, the visit by foreign nationals to witness the Common Wealth Games in India amounts to

(a) Export

(b) Import

(c) Production

(d) Consumption

 

3. If the interest rate is decreased in an economy, it will  

(a)   decrease the consumption expenditure in the economy

(b)   increase the tax collection of the Government

(c)   increase the investment expenditure in the economy

(d)   increase the total savings in the economy

 

4. Economic growth in country A will necessarily have to occur if

(a) there is technical progress in the world economy

(b) there is population growth in A

(c) there is capital formation in A

(d) the volume of trade grows in the world economy

 

5. A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?.

(a) It is the impact of drastic deficiency in supply due to failure of crops
(b) It is the impact of the surge in demand due to rapid economic growth
(c) It is the impact of the price levels of previous year on the calculation of inflation rate
(d) None of the statements (a), (b) and (c) ‘given above is correct in this context

 

Answers & Explanations

  1. (b)

Capital means asset, capital gains means rise in the value of asset. Sale increase is not asset price rise, property value rise is asset value rise, similar is the case with painting.

  1. (a)

It can not be said a consumption. If you have read something about the “Balance of Payments”, the income was from “tourism” and that is an invisible export.

 

  1. (c)

 https://indianexpress.com/article/explained/coronavirus-rbi-how-reverse-repo-rate-became-benchmark-interest-rate-in-the-economy-6369999/

https://indianexpress.com/article/explained/simply-put-why-interest-rates-arent-falling-rbi-banking-6079391/

  1. (c)

 https://indianexpress.com/article/opinion/columns/economy-slowdown-gdp-growth-development-where-demand-has-gone-6230425/

  1. (c)

https://indianexpress.com/article/explained/explained-why-has-industrial-production-contracted-in-december-and-what-it-means-for-indias-economy-6264949/

 

 

 

 

 

 

 

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