What are the main components of basic social infrastructure of an economy?
(a) Education, Industry and Agriculture
(b) Education, Health and Civil amenities
(c) Transport, Health and Banks
(d) Industry, Trade and Transport
Solution: (b)
Social infrastructure refers to the facilities and mechanisms that ensure education, health care, community development, income distribution, employment and social welfare. It includes health care system, including hospitals, the financing of health care, including health insurance, the systems for regulation and testing of medications and medical procedures; the educational and research system, including elementary and secondary schools, universities, specialised colleges, research institutions; Social welfare systems; Sports and recreational infrastructure, such as parks, sports facilities, the system of sports leagues and associations; Cultural infrastructure; and business travel and tourism infrastructure, including both man made and natural attractions, etc.
Government securities are considered liquid because they are
(a) backed by the Government treasury
(b) convertible into other types of saving deposits
(c) quickly and easily marketable
(d) stable in value
Solution: (c)
Liquid Asset is an asset that can be converted into cash quickly and with minimal impact to the price received. In a liquid market, assets can be easily converted without considerable price fluctuation, and with a minimal decline in worth. A liquid market is a type of market that possesses a high level of stability, and low spreads between asking and selling prices. Securities issued by the Government are considered risk-free, and as such, their yields are often used as the benchmarks for fixed- income securities with the same maturities. The government securities market constitutes a key segment of the financial market, heavily traded offering virtually credit risk-free highly liquid financial instruments, which market participants are more willing to transact and take positions.
Solution: (c)
In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. The condition of equilibrium of income is the equality of intended saving and intended investment. An economy is in equilibrium when total savings equal total investment.
What is referred to as “Depository Services”?
(a) A new scheme of fixed deposits
(b) A method of regulating stock exchanges
(c) An agency for safe-keeping of securities
(d) An advisory service to investors
Solution: (c)
A Central Securities Depository (CSD) is an organization holding securities either in certificated or un-certificated (dematerialized) form, to enable book entry transfer of securities. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. The physical securities may be immobilized by the depository, or securities may be dematerialized (so that they exist only as electronic records). The following are depository services: Demat accounts; dematerialization; rematerialization; transfer of securities; and pledge services.
What does a Leasing Company provide?
(a) Machinery and capital equipment on hire
(b) Legal guidance in establishing an enterprise
(c) Office accommodation on hire
(d) Technical consultancy and experts for a fee
Solution: (a)
Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of contractual, periodic, tax deductible payments. Equipment leasing is a financing alternative for businesses to acquire needed machinery while saving precious operating capital. Leasing provides opportunities to use available money to operate assets that can make more money over time. There are many distinct differences between buying and leasing, regardless if such a transaction or agreement applies to property, machinery, equipment or other assets. The difference lies in that a lease is conceptually very similar to the principle of “borrowing.” The ownership of the leased property (be it land, equipment, merchandise, or etc.) is not transferred under the terms of the lease agreement.
Interest on public debt is a part of:
(a) transfer payments by the enterprises
(b) transfer payments by the Govt.
(c) national income
(d) interest payments by households
Solution: (b)
In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system. These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services. Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).
Indirect tax means:
(a) there is not direct relationship between the tax payer and the government.
(b) direct relationship between tax payer and the government.
(c) tax base is income
(d) the incidence and impact are on the same person on whom tax is imposed.
Solution: (a)
The term indirect tax has more than one meaning. In the colloquial sense, an indirect tax (such as sales tax, a specific tax, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the consumer). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons (legal or natural) on which it is imposed.
If people’s income of a country is denoted in a curved line space that it has increased, then what does it denote?
(a) the income is increasing
(b) the income is decreasing
(c) dissimilarity is decreasing in income distribution
(d) dissimilarity in income distribution is increasing
Solution: (c)
It shows inequality in income distribution. Inequality indices can also be derived directly from the Lorenz curve. Perhaps the most commonly-used inequality index is the Gini coefficient, which ranges from 0 (perfect equality) to 1 (perfect inequality). It is the ratio of the area enclosed by the Lorenz curve and the perfect equality line to the total area below that line.
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