Top Ad unit 728 × 90




61. Q. What is meant by Excise duty?
Excise Duty : Tax imposed on the manufacture, sale to the consumption of various commodities, such as taxes on textiles, cloth, liquor, etc.

62. Q. What is meant by Fiscal Policy?

Ans. Fiscal Policy : Governments expenditure and Tax policy.

63. Q. What is meant by Foreign Exchange?
Ans. Foreign Exchange : Claims on a country by another, held in the form of currency of that country. Foreign exchange system enables one currency to be exchanged for another, thus facilitating trade between countries.

64. Q. What is Gross Domestic Product?
Ans. Gross Domestic Product (GDP) : A measure of the total flow of goods and services produced by the economy over a specific time period, normally a year. It is obtained by valuing output of goods and services at market prices and then aggregating.

65. Q. What are Indirect Taxes?
Ans. Indirect Taxes : Taxes levied on goods purchased by the consumer for which the tax payer's liabilities varies in proportion to the quantity of particular goods purchased or sold.

66. Q. What do you understand by Laissez-faire?
Ans. Laissez-faire : The principle of non-intervention of government in economic affairs.

67. Q. What is meant by mixed economy?
Ans. Mixed Economy : Total economy in which there is a unique blend of public sector and private sector co-exist. The perfect example is India.

68.Q. What is National Income?
Ans. National Income : Total of all incomes earned or input to factors of production, used in economic literature to represent the output or income of an economy in a simple fashion.

69. Q. What is per capital income?
Ans. Per Capita Income : Total GNP of a country divided by the total population.

70. Q. What are Patents?
Ans. Patents : It is an exclusive right granted under the patents Act to the inventor for a new invention.

71. Q. What are preference shares?
Ans. Preference Shares : These are the shares entitled to a fixed dividend before any distribution of profits can be made amongst the holders of ordinary shares or stock.

72. Q. What is public sector?
Ans. Public Sector : A term which is generally applied to state enterprises, ie, those companies which are nationalised and run by the government.

73. Q. What is recession?
Ans. Recession : It happens when there is excess of production over demand.

74. Q. What is ad valorem tariff?
Ans. Tariff (ad valorem) : A fixed percentage tax on the value of an imported commodity, levied at the point of entry into the importing country

75. Q. What is meant by Value Added Tax?
Value Added Tax (VAT) : A tax levied on the values that are added to goods and services turned out by the producers during stages of production and distribution.

76. Q. What is Zero Based Budgeting?
Zero Based Budgeting (ZBB) : The practice of justifying the utility in cost benefit terms of each government expenditure on projects. The ZBB Technique involves a critical review of every scheme before a budgetary provision is made in its favour. If ZBB is properly implemented it could help to reverse the trend of large deficits on the revenue account of the Union Government.

77. Q. What do the terms CRR and SLR mean?
CRR, or cash reserve ratio, refers to a portion of deposits (as cash) which banks have to keep/maintain with the RBI. This serves two purposes. It ensures that a portion of bank deposits is totally risk-free and secondly it enables that RBI control liquidity in the system, and thereby, inflation.
Besides the CRR, banks are required to invest a portion of their deposits in government securities as a part of their statutory liquidity ratio (SLR) requirements.
The government securities (also known as gilt-edged securities or gilts) are bonds issued by the Central government to meet its revenue requirements. Although the bonds are long-term in nature, they are liquid as they can be traded in the secondary market.
Since 1991, as the economy has recovered and sector reforms increased, the CRR has fallen from 15 per cent in March 1991 to 5.0 per cent in March 2009. The SLR has fallen from 38.5 per cent to 24 per cent over the past few years. (as on 5.3.2009)
78. Q. What impact does a cut in CRR have on interest rates?
From time to time, RBI prescribes a CRR or the minimum amount of cash that banks have to maintain with it. A cut in CRR will result in more money available in the hands of banker and relatively their need for funds will be less. Hence banks will be offering lower rate of interest on their deposits.
79. Q. How does the Monetary Policy affect the domestic industry and exporters in particular?
Exporters look forward to the monetary policy since the central bank always makes an announcement on export refinance, or the rate at which the RBI will lend to banks which have advanced pre-shipment credit to exporters.
A lowering of these rates would mean lower borrowing costs for the exporter.
80. Q. The stock markets and money move similarly, in some ways. Why?
Most people attribute the link between the amount of money in the economy and movements in stock markets to the amount of liquidity in the system. This is not entirely true.
The factor connecting money and stocks is interest rates. People save to get returns on their savings. In true market conditions, this made bank deposits or bonds (whose returns are linked to interest rates) and stocks (whose returns are linked to capital gains), competitors for people's savings.
A hike in interest rates would tend to suck money out of shares into bonds or deposits; a fall would have the opposite effect. This argument has survived econometric tests and practical experience.
BANKING RELATED ECONOMICS QUIZ -4 Reviewed by sambasivan srinivasan on 10:15:00 PM Rating: 5

No comments:

All Rights Reserved by Bank Exams © 2009
Technology PartnerNiralcube

Contact Form


Email *

Message *

Powered by Blogger.