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Question 1 of 10
1. Question
2 points
Increase in India’s trade deficit may lead to which of the following:
Correct
Answer:
(b)
When trade deficit increases that means imports are increasing in the country as compared to exports. Increase in imports causes an increase in demand for dollars which results in decline in value of Indian currency.
Increase in trade deficit results in money going out of the Indian economy.
Incorrect
Answer:
(b)
When trade deficit increases that means imports are increasing in the country as compared to exports. Increase in imports causes an increase in demand for dollars which results in decline in value of Indian currency.
Increase in trade deficit results in money going out of the Indian economy.
Question 2 of 10
2. Question
2 points
Which of the following situation may lead to depreciation of a country’s currency with respect to another country:
Correct
Answer:
(d)
When foreign investors come to India, they bring dollars and this dollar they sell in forex market and demand rupees which results in increase in demand of rupee and rupee appreciates.
When exports increase, we earn more dollars from the foreign market and this dollar we sell in the forex market to purchase rupees which results in increase in demand of rupees and rupee appreciates.
When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation.
So, none of the statements are true.
Incorrect
Answer:
(d)
When foreign investors come to India, they bring dollars and this dollar they sell in forex market and demand rupees which results in increase in demand of rupee and rupee appreciates.
When exports increase, we earn more dollars from the foreign market and this dollar we sell in the forex market to purchase rupees which results in increase in demand of rupees and rupee appreciates.
When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation.
So, none of the statements are true.
Question 3 of 10
3. Question
2 points
The export competitiveness of a country with its trading partners can be best measured through which of the following exchange rates:
Correct
Answer:
(D)
Incorrect
Answer:
(D)
Question 4 of 10
4. Question
2 points
If ‘Real Effective Exchange Rate’ of a country appreciates then which of the following will be true:
Correct
Answer:
(b)
Suppose Nominal Exchange Rate is $1 = Rs.60
India US
Burger Price Rs. 30 $1
Whether India will export burgers to US or not depends on three parameters/prices
Price of Burger in US (directly proportional, i.e. if it increases, exports to US will increase)
Price of Burger in India (indirectly proportional, i.e. if it increases exports to US will decrease)
Nominal Exchange Rate (directly proportional, i.e. if it increases exports to US will increase)
And all the three parameters are captured in Real Exchange Rat
Real Exchange Rate = Price in US X Nominal Exchange Rate Price in India
= 1 X 60
30
= 2
Till Real Exchange Rate > 1, India will continue to export its burgers to US. If Real Exchange Rate becomes equal to 1, then export & import will stop. If Real Exchange Rate < 1, then US will start exporting its burgers to India.
So Real Exchange Rate determines export competitiveness between two countries.
Incorrect
Answer:
(b)
Suppose Nominal Exchange Rate is $1 = Rs.60
India US
Burger Price Rs. 30 $1
Whether India will export burgers to US or not depends on three parameters/prices
Price of Burger in US (directly proportional, i.e. if it increases, exports to US will increase)
Price of Burger in India (indirectly proportional, i.e. if it increases exports to US will decrease)
Nominal Exchange Rate (directly proportional, i.e. if it increases exports to US will increase)
And all the three parameters are captured in Real Exchange Rat
Real Exchange Rate = Price in US X Nominal Exchange Rate Price in India
= 1 X 60
30
= 2
Till Real Exchange Rate > 1, India will continue to export its burgers to US. If Real Exchange Rate becomes equal to 1, then export & import will stop. If Real Exchange Rate < 1, then US will start exporting its burgers to India.
So Real Exchange Rate determines export competitiveness between two countries.
Question 5 of 10
5. Question
2 points
Consider the following statements regarding the transactions happening at the international level for trade and financial flows.
(i) There is an international authority with the power to force the use of a particular currency
(ii) There is a basket of currencies which can only be used to settle international transactions
(iii) Currencies which maintain a stable purchasing power are generally accepted
(iv) Freely convertible currencies are generally accepted
Select the correct answer using the code given below:
Correct
Answer:
(C)
This is no international authority which directs that trade between two countries should happen only with some specific currencies. Any two countries are free to transact with any currency if they are willing.
Generally, any country will accept that currency for its trade (exports), if that currency is not losing value (less inflation) and it is stable and it is freely convertible in other currencies.
Incorrect
Answer:
(C)
This is no international authority which directs that trade between two countries should happen only with some specific currencies. Any two countries are free to transact with any currency if they are willing.
Generally, any country will accept that currency for its trade (exports), if that currency is not losing value (less inflation) and it is stable and it is freely convertible in other currencies.
Question 6 of 10
6. Question
2 points
Which of the following factors can cause tsunamis in the ocean?
Volcanic eruption
A large meteorite strike
Underwater landslide
Undersea earthquakes
Select the correct code:
Correct
Solution: d)
A tsunami is a large ocean wave that is caused by sudden motion on the ocean floor. This sudden motion could be an earthquake, a powerful volcanic eruption, or an underwater landslide. The impact of a large meteorite could also cause a tsunami. Tsunamis travel across the open ocean at great speeds and build into large deadly waves in the shallow water of a shoreline.
Incorrect
Solution: d)
A tsunami is a large ocean wave that is caused by sudden motion on the ocean floor. This sudden motion could be an earthquake, a powerful volcanic eruption, or an underwater landslide. The impact of a large meteorite could also cause a tsunami. Tsunamis travel across the open ocean at great speeds and build into large deadly waves in the shallow water of a shoreline.
Question 7 of 10
7. Question
2 points
The impact of a tsunami is less over the ocean and more near the coast because
Seismic forces are absent near coasts.
Wavelength of tsunami water reduces as it approaches the coast.
Select the correct answer code:
Correct
Solution: b)
The speed of wave in the ocean depends upon the depth of water. It is more in the shallow water than in the ocean deep. As a result of this, the impact of tsunami is less over the
ocean and more near the coast where they cause large-scale devastations.
Seismic forces will be present wherever there is a play of tectonics, i.e. plate movements. Coastal belts are no exception.
Incorrect
Solution: b)
The speed of wave in the ocean depends upon the depth of water. It is more in the shallow water than in the ocean deep. As a result of this, the impact of tsunami is less over the
ocean and more near the coast where they cause large-scale devastations.
Seismic forces will be present wherever there is a play of tectonics, i.e. plate movements. Coastal belts are no exception.
Question 8 of 10
8. Question
2 points
Disasters covered under State Disaster Response Fund (SDRF) are:
What is the correct sequence of occurrence of the rivers in Peninsular India as one proceeds from South to North?
Ponnaiyar
Krishna
Palar
Vamsadhara
Select the correct answer code:
Correct
Solution: d)
Incorrect
Solution: d)
Question 10 of 10
10. Question
2 points
Most parts of India do not have rainfall in the winter season, because
The wind moves from land to sea.
Cyclonic circulation on land
There is little humidity
Select the correct answer code:
Correct
Solution: a)
Winter monsoons do not cause rainfall as they move from land to the sea. It is because firstly, they have little humidity; and secondly, due to anti cyclonic circulation on land, the possibility of rainfall from them reduces. So, most parts of India do not have rainfall in the winter season.
Incorrect
Solution: a)
Winter monsoons do not cause rainfall as they move from land to the sea. It is because firstly, they have little humidity; and secondly, due to anti cyclonic circulation on land, the possibility of rainfall from them reduces. So, most parts of India do not have rainfall in the winter season.
