SOLVED CAIIB COMBINED PAPER 6:
1. Which of the following statements is true about ‘Inflation?’
(i) A rise in the general level of prices,
(ii) Leads to fall in purchasing power
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
2. In which stage ideal worker are come forward to work on low wages.
a. Recession
b. depression
c. Recovery
d. Boom
Ans - c
3. Given,
Currency with public - Rs. 90000 Crores
Demand deposit with banking system - Rs. 180000 Crores
Time deposits with banking system - Rs. 220000 Crores
Other deposit with RBI - Rs. 260000 Crores
Savings deposit of post office savings banks - Rs. 60000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M2.
a. Rs. 470000 Crores
b. Rs. 550000 Crores
c. Rs. 590000 Crores
d. Rs. 630000 Crores
Ans - c
Solution
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 90000+180000+260000
M1 = 530000
M2 = M1+Savings deposit of post office savings banks
So,
M2 = 530000+60000
M2 = 590000 Crores
4. Demand Deposits are ......
(i) Paid on demand,
(ii) Relatively less liquid than time deposits
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - a
5. An increase in government expenditure or transfer payments will shift the IS curve ......
a. To right
b. To left
c. No change
d. Downwards
Ans - a
6. Calculate Inflation, if Price index in current year is 13 and price index in base year is 10.
a. 20
b. 25
c. 30
d. 35
Ans - c
solution :
Inflation = (price index in current year-price index in base year)/(price index in base year)*100
= (13-10)/10*100
= 3/10*100
= 30
7. What are the forces behind the demand curve?
(i) Expectation about future economic conditions,
(ii) Average Income
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
8. In capital market the erstwhile badla system is replaced by ......
a. Open market system
b. Out cry system
c. Option and futures
d. Logging system
Ans - c
9. Go through the following data and answer the questions (all in Indian Rupees in Crores)
1. Consumptions - Rs. 30000
2. Gross investment - Rs. 40000
3. Govt spending - Rs. 20000
4. Export - Rs. 70000
5. Import - Rs. 60000
6. Taxes - Rs. 5000
7. Subsidies(on production and import) - RS. 1000
8. Compensation of employee - Rs. 500
9. Property Income - Rs. 500
7,8,9 - Net receivable from aboard
10.Total capital gains from overseas investment - Rs. 1500
11.Income earned by foreign national domestically - Rs. 500
Calculate GDP at cost factor
a. Rs. 90000
b. Rs. 94000
c. Rs. 96000
d. Rs. 104000
Ans - c
Solution :
GDP = C+I+G+(X-M)
= 30000+40000+20000+(70000-60000)
= 100000
GDP at factor rate
= GDP-(Indirect taxes-subsidies)
= 100000-(5000-1000)
= 96000
10. If in market money supply increase and interest rate decreases, the LM curve will ...
a. shift up and to left
b. shift down and to right
c. shift up and to right
d. shift down and to left
Ans - b
11. Market Demand Curve obeys the ......
(i) Law of downward-sloping demand
(ii) Law of upward-sloping demand
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - a
12. Given,
Currency with public - Rs. 90000 Crores
Demand deposit with banking system - Rs. 180000 Crores
Time deposits with banking system - Rs. 220000 Crores
Other deposit with RBI - Rs. 260000 Crores
Savings deposit of post office savings banks - Rs. 60000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M4.
a. Rs. 750000 Crores
b. Rs. 800000 Crores
c. Rs. 810000 Crores
d. Rs. 870000 Crores
Ans - b
Solution :
M4 = M3+All deposit with post office savings bank excluding NSCs
M3 = M1+Time deposit with banking system
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 90000+180000+260000
M1 = 530000
So,
M3 = M1+Time deposit with banking system
M3 = 530000+220000
M3 = 750000 Crores
So,
M4 = M3+All deposit with post office savings bank excluding NSCs
M4 = 750000+50000
M4 = 800000 Crores
(i) A rise in the general level of prices,
(ii) Leads to fall in purchasing power
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
2. In which stage ideal worker are come forward to work on low wages.
a. Recession
b. depression
c. Recovery
d. Boom
Ans - c
3. Given,
Currency with public - Rs. 90000 Crores
Demand deposit with banking system - Rs. 180000 Crores
Time deposits with banking system - Rs. 220000 Crores
Other deposit with RBI - Rs. 260000 Crores
Savings deposit of post office savings banks - Rs. 60000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M2.
a. Rs. 470000 Crores
b. Rs. 550000 Crores
c. Rs. 590000 Crores
d. Rs. 630000 Crores
Ans - c
Solution
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 90000+180000+260000
M1 = 530000
M2 = M1+Savings deposit of post office savings banks
So,
M2 = 530000+60000
M2 = 590000 Crores
4. Demand Deposits are ......
(i) Paid on demand,
(ii) Relatively less liquid than time deposits
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - a
5. An increase in government expenditure or transfer payments will shift the IS curve ......
a. To right
b. To left
c. No change
d. Downwards
Ans - a
6. Calculate Inflation, if Price index in current year is 13 and price index in base year is 10.
a. 20
b. 25
c. 30
d. 35
Ans - c
solution :
Inflation = (price index in current year-price index in base year)/(price index in base year)*100
= (13-10)/10*100
= 3/10*100
= 30
7. What are the forces behind the demand curve?
(i) Expectation about future economic conditions,
(ii) Average Income
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - d
8. In capital market the erstwhile badla system is replaced by ......
a. Open market system
b. Out cry system
c. Option and futures
d. Logging system
Ans - c
9. Go through the following data and answer the questions (all in Indian Rupees in Crores)
1. Consumptions - Rs. 30000
2. Gross investment - Rs. 40000
3. Govt spending - Rs. 20000
4. Export - Rs. 70000
5. Import - Rs. 60000
6. Taxes - Rs. 5000
7. Subsidies(on production and import) - RS. 1000
8. Compensation of employee - Rs. 500
9. Property Income - Rs. 500
7,8,9 - Net receivable from aboard
10.Total capital gains from overseas investment - Rs. 1500
11.Income earned by foreign national domestically - Rs. 500
Calculate GDP at cost factor
a. Rs. 90000
b. Rs. 94000
c. Rs. 96000
d. Rs. 104000
Ans - c
Solution :
GDP = C+I+G+(X-M)
= 30000+40000+20000+(70000-60000)
= 100000
GDP at factor rate
= GDP-(Indirect taxes-subsidies)
= 100000-(5000-1000)
= 96000
10. If in market money supply increase and interest rate decreases, the LM curve will ...
a. shift up and to left
b. shift down and to right
c. shift up and to right
d. shift down and to left
Ans - b
11. Market Demand Curve obeys the ......
(i) Law of downward-sloping demand
(ii) Law of upward-sloping demand
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - a
12. Given,
Currency with public - Rs. 90000 Crores
Demand deposit with banking system - Rs. 180000 Crores
Time deposits with banking system - Rs. 220000 Crores
Other deposit with RBI - Rs. 260000 Crores
Savings deposit of post office savings banks - Rs. 60000 Crores
All deposit with post office savings bank excluding NSCs - Rs. 50000 Crores
Calculate M4.
a. Rs. 750000 Crores
b. Rs. 800000 Crores
c. Rs. 810000 Crores
d. Rs. 870000 Crores
Ans - b
Solution :
M4 = M3+All deposit with post office savings bank excluding NSCs
M3 = M1+Time deposit with banking system
M1 = currency with public + demand deposit with the banking system + other deposits with RBI
M1 = 90000+180000+260000
M1 = 530000
So,
M3 = M1+Time deposit with banking system
M3 = 530000+220000
M3 = 750000 Crores
So,
M4 = M3+All deposit with post office savings bank excluding NSCs
M4 = 750000+50000
M4 = 800000 Crores