Question : Which of the following statements is correct regarding the government securities in the economy? I. It is a tradeable instrument issued by the Central or State Governments. II. They are called risk-free, gilt-edged instruments.
Option 1: Neither I nor II
Option 2: Only I
Option 3: Only II
Option 4: Both I and II
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Correct Answer: Both I and II
Solution : The correct option is Both I and II.
I. Government securities are debt instruments issued by the government to raise funds for various purposes. They are traded on the secondary market, allowing investors to buy and sell them before their maturity date.
II. While no investment is entirely risk-free, government securities are considered highly secure due to the low probability of the government defaulting on its debt. This low risk gives them the label "gilt-edged" instruments. However, risks, like interest rate fluctuations and changing government policies, can still affect their value.
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Question : Which of the following statements is correct regarding the bank reserves? I. These reserves are kept partly as cash and partly in the form of financial instruments. II. Cash Reserves Ratio are deposits that commercial banks keep with the Reserve Bank of India.
Option 1: Only II
Option 2: Both I and II
Option 3: Only I
Option 4: Neither I nor II
Question : Which of the following statements is correct regarding the socialist society in the economy?
I. The government decides what goods are to be produced. II. Distribution of goods under socialism is supposed to be based on what people need.
Option 1: Only I
Option 2: Neither I nor II
Option 3: Both I and II
Option 4: Only II
Question : Which of the following statements is correct regarding the production possibility frontier?
I. It gives the combinations between two goods that can be produced when the resources of the economy are fully utilised.
II. It illustrates the production possibilities of the economy.
Option 2: Only II
Question : Which among the following statements is incorrect?
Option 1: The Industrial Securities Market is also known as a gilt-edged market.
Option 2: The secondary market is the market for the sale and purchase of previously issued securities.
Option 3: RBI plays a dominant role in the gilt-edged market through its 'Open Market Operations'.
Option 4: The primary market is also known as the new issue market.
Question : Which of the following statements is correct regarding the Lucknow Pact? I. It was signed in the year 1916. II. It was signed between the moderate and radical factions of Congress.
Option 1: Both I and II
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