XtraStudy Header

Question 1

Q16. Gross domestic capital formation is defined as

flow of expenditure devoted to increased or maintaining of the capital stock.

expenditure incurred on physical assets only.

production exceeding demand.

net addition to stock after depreciation.

Answer

Answer : net addition to stock after depreciation.

Gross domestic capital formation is defined as net addition to stock after depreciation.

A measure of total investment. ‘Gross’ indicates that it is measured without subtracting any allowance for capital consumption; ‘domestic’ that it refers to investment in the country regardless of ownership. It thus includes investment in the country by companies owned by non-residents, and excludes investment abroad by resident firms.

Gross domestic capital formation is the addition to the capital stock within the domestic territory of a country during a year. The surplus of production over consumption during a year adds to the capital stock of a country. Gross capital formation which includes two components such as (a) Gross domestic fixed capital formation (b) change in stock.

Gross domestic capital formation includes all expenses made by household, business people and Govt, adding new durable goods to the fixed capital stock of a country. These assets are in the form of infrastructure such as buildings, roads canals, bridges, means of transport, machinery and other equipments. The value of the new fixed assets is equal to the expenditure made on new capital assets bought.
⚔ DISCUSS

Question 2

Q17. Which of the following is the most appropriate cause of exports surplus?

Country's exports promotion value

Country's stringent import policy

Developments in national and international markets

None of the above

Answer

Answer : Developments in national and international markets

Developments in national and international markets is the most appropriate cause of exports surplus.

A steady export surplus means that the exporting country is sending out an excess of goods and services, over and above its imports.
⚔ DISCUSS

Question 3

Q18. Which of the following items would not appear in a company's balance sheet?

Value of stocks of raw materials held

Total issued capital

Revenue from sales of the company's products

Cash held at the bank

Answer

Answer : Revenue from sales of the company's products

Question 4

Q19. The currency convertibility concept in its original form originated in

Wells Agreement

Bretton Woods Agreement

Taylors Agreement

None of the above

Answer

Answer : Bretton Woods Agreement

The Bretton Woods agreement was created in a 1944 conference of all of the World War II Allied nations. It took place in Bretton Woods, New Hampshire.

The 1944 Bretton Woods agreement established a new global monetary system. It replaced the gold standard with the U.S. dollar as the global currency. By so doing, it established America as the dominant power in the world economy. After the agreement was signed, America was the only country with the ability to print dollars.

The agreement created the World Bank and the International Monetary Fund. These U.S.-backed organizations would monitor the new system.

Under the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. How exactly would they do this? If a country's currency value became too weak relative to the dollar, the bank would buy up its currency in foreign exchange markets. That would lower the currency's supply and raise its price. If its currency became too high, the bank would print more. That would increase the supply and lower its price.

Members of the Bretton Woods system agreed to avoid trade wars. For example, they wouldn't lower their currencies strictly to increase trade. But they could regulate their currencies under certain conditions.
⚔ DISCUSS

Question 5

Q20. The central co-operative banks are in direct touch with

farmers

state co-operative banks

land development banks

central government

Answer

Answer : state co-operative banks

The central co-operative banks are in direct touch with state co-operative banks.

Cooperative bank is an institution established on the cooperative basis and dealing in ordinary banking business. Like other banks, the cooperative banks are founded by collecting funds through shares, accept deposits and grant loans.

State cooperative banks are the apex institutions in the three-tier cooperative credit structure, operating at the state level. Every state has a state cooperative bank. State cooperative banks obtain their working capital from own funds, deposits, borrowings and other sources. The main source of deposits is also the cooperative societies and central cooperative banks. The remaining deposits come from individuals, local bodies and others.

Central cooperative banks are in the middle of the three-tier cooperative credit structure. The central cooperative banks raise their working capital from own funds, deposits, borrowings and other sources. In the own funds, the major portion consists of share capital contributed by cooperative societies and the state government, and the rest is made up of reserves. Deposits largely come from individuals and cooperative societies. Some deposits are received from local bodies and others. Deposit mobilisation by the central cooperative banks varies from state to state.
⚔ DISCUSS

Explore

Explore

About

App Link

Others

Register Now