516: Which reference to the Wholesale Price Index (WPI), consider the following statements:
1. The new WPI series with base 1993-94 = 100 became effective from April 1998
2. In the new WPI series, became effective from 1 April 2000. Statements 2 and 3 are correct
3. The weight for electricity has increased in the new WPI series
Which of these statements are correct ?
(a) 1, 2 and 3
(b) 2 and 3
(c) 1 and 3
(d) 1 and 2
Explanation:
The new WPI series with base 1993-94 = 100 became effective from April 2000.
517: An increase in the Bank Rate generally indicates that the
(a) market rate of interest is likely to fall
(b) Central Bank is no longer making loans to commercial banks
(c) Central Bank is following an easy money policy
(d) Central Bank is following a tight money policy
Explanation:
Bank rate is a tool which RBI uses for managing money supply and credit.
Bank rate is the rate of interest which a central bank charges on the loans and advances to a commercial bank.
Hence, when central bank increases the bank rate it means it is following a tight money policy.
518: Consider the following statements:
The price of any currency in international market is decided by the
1. World Bank
2. demand for goods/services provided by the country concerned
3. stability of the government of the concerned country
4. economic potential of the country in question
Which of the statements given above are correct?
(a) 1, 2, 3 and 4
(b) 2 and 3 only
(c) 3 and 4 only
(d) 1 and 4 only
Explanation:
In international markets, the price of any currency is decided just like the price of any other commodity in the market, by the relative demand and supply. If there are more buyers wanting to buy the currency relative to the amount of the currency available for supply by th suppliers of that currancy, the price of that currency will rise, meaning thereby that the currency will strengthen. The currency market is sensitive to both future expectations and speculators. If the economy of a country is not doing well, fewer people will wish to invest there, so the currency of that country will fall. On the other hand if, for some reason, people expect that the currency will fall, they will take their investments out, and so actually made the currency fall. Hence, the demand of goods/services produced by the country and the stability of the government in the country determines the price of the currency of the concerned country.
However, World Bank provides financial help for development projects and economic potential of the country is a long-term factor whereas price of the currency is a short-term factor.
519: In India, deficit financing is used for raising resources for
(a) economic development
(b) redemption of public debt
(c) adjusting the balance of payments
(d) reducing the foreign debt
Explanation:
Deficit financing describe financing of gap between public revenue and public expenditure or we can say financing of budgetary deficit.
The main objective of deficit financing in developing country like India is to promote economic development.
520: Consider the following statements:
Coal sector was nationalized by the Government of India under Indira Gandhi.
Now, coal blocks are allocated on lottery basis.
Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Explanation:
i. Coal sector was nationalised in two phases under Indira Gandhi Government in 1972.
ii. The coal Blocks are allocated through Auctions not on lottery basis.
iii. The coal sector is the monopolistic sector in India. India holds 5th biggest coal reserves in the world but due to incapacity of coal production by monopolistic firms, it imports coals to meet the shortages of domestic supply. But, still the country is not self-sufficient of coal production.
Hence option (A) is correct
Source: https://coal.nic.in/content/historybackground
https://blog.ipleaders.in/coal-blocks/