CAPF (AC) 2013 (Paper-1) (Question 51-100)

Total Questions: 50

41. If we deduct grants for creation of capital assets from revenue deficit, we arrive at the concept of

Correct Answer: (d) effective revenue deficit
Solution:Fiscal deficit is the difference between what a government spends by way of its expenditure and what it collects by way of revenue during a financial year.

Effective revenue deficit is referred to as the difference between revenue deficit and grants for the creation of capital assets. A fiscal deficit can lead to cost-push inflation. Higher interest rates increase production cost, which is burdened on the consumers, thereby leading to higher prices.

42. Which one among the following items has maximum weight in wholesale price index in India?

Correct Answer: (c) Manufactured product
Solution:The basket used in the Wholesale Price Index is composed of three groups: Manufactured Products (65%) of total weight, Primary articles like food, etc. (20.1%) and Fuel and Power (14.9%). The Wholesale Price Index is calculated by the Ministry of Commerce and Industry.

43. Which among the following agencies disbursed maximum credit to the agricultural sector in India between 2006-07 and 2011-12?

Correct Answer: (c) Commercial banks
Solution:Economic Survey of Agency wise credit disbursed in the economics 2006-07 and also 2011-12. In the following table, there is given the share of the cooperative bank, regional rural bank and commercial bank.
Agency2006-072007-082008-092009-102010-112011-12
Cooperative banks $424804825846192634977812187963
Share (%18.5218.9515.3016.5116.6817.21
RRBs204.352531226765352,184429354450
Share (%)8.919.948.879.169.4610.65
Commercial banks166485181088228951285799345877368616
Share (%)72.5771.1175.8374.3373.8672.13
Total (1+2+3)229400254658301908384514468291511029

As per the above table, the commercial banks' share has remained above 70% consistently. Therefore, the answer is (c).

44. Consider the following statements:

1. Repo rate is the interest rate at which RBI lends to commercial banks for short period.

2. Reverse repo rate is the interest rate which RBI pays to commercial banks on short term deposits.

3. Gap between repo rate and reverse repo rate has been declining in India in the recent past.

Which of the statements given above is/are not correct?

Correct Answer: (c) 3 only
Solution:The definition of Reverse repo rate, "it is the interest rate paid by RBI to its clients for short term loans." Repo rate is the rate RBI charges on its clients for short term loans. Clients of RBI are such as the Central Government, State Government, Banks (commercial, regional rural banks, cooperative banks) and Non-banking financial institutions, etc.

The reverse repo rate is 100 basis points lower than the repo rate. In other words, Repo rate = reverse repo + 1%. So the gap in the recent past is not 'declining'. The gap is fixed at 1%=> statement 3 is incorrect.

45. The rate of inflation in India is measured generally in respect of movement of

Correct Answer: (b) wholesale price index
Solution:WPI (Wholesale Price Index) inflation is used at macro level policymaking, CPI (Consumer Price Index) inflation is used for micro-level analysis. The inflation at WPI is the inflation of the economy.

An official inflation rate is measured based on annual point-to-point basis change in the Wholesale Price Index (WPI). The purpose of WPI is to examine the movement in prices of goods that reflect supply and demand in industry, construction and manufacturing.

46. Privatization includes

Correct Answer: (d) All of the above
Solution:Privatization occurs when a government-owned business, operation, or property becomes owned by a private, non-government party. Privatization of specific government operations occurs in various ways the government transfers ownership of specific facilities or business processes to a private, for-profit company. India selected privatization in the budget of 1991, also known as 'New Economic Policy or LPG policy'.

47. Which of the following statements is correct with respect to the convertibility of India rupee?

Correct Answer: (b) It is convertible on current account
Solution:India is fully convertible on the current account and partly convertible on the capital account. The facility that prevailed in the diplomacy of the government is the rupee which is fully convertible on the current account.

Moreover, the rupee is the same remaining capital account non-convertible. Capital account convertibility permits freedom to change local financial assets into foreign financial assets and vice-versa.

48. The Government of India refers to the absolute poverty line in terms of

Correct Answer: (b) household consumption
Solution:The government of India refers to the absolute poverty household termed as Household consumption. The poverty line defines households earning less than the threshold are referred as the poor.

Poverty is estimated as per the consumer expenditure experiments or surveys of the National Sample Survey Organisation. A poor household means one with an expenditure level and also a particular poverty-line.

49. In the current pricing policy, the price of diesel in India consists of

Correct Answer: (a) Fuel component + Customs duty + Excise duty + Sale VAT + Dealer's commission
Solution:The pricing policy of Diesel in India would be in such manner as Fuel component + Customs Duty + Excise Duty + Sales VAT + Dealer's commission. Public sector undertakings should operate their activities at the lowest possible cost along with maximum increased efficiency and they must raise adequate resources for re-investment purposes while determining the price policy various considerations relating to costs and benefits to the various sections of the community are to be considered carefully in our society.

50. Which one among the following is not a Mars rover?

Correct Answer: (d) Apollo
Solution:A Mars rover is a motor vehicle that journeys above the surface of the planet Mars upon arrival. The first three are names of rovers sent to Mars over different period by NASA.

The Apollo spacecraft was composed of three parts designed to accomplish the American Apollo program's goal of landing astronauts on the Moon by the end of the 1960s and returning them safely to Earth. The first moon landing took place in 1969. The last moon landing was in 1972.