Answer: C

Explanation:

Answer: (C)

Explanation: The International Finance Corporation (IFC) is an international financial institution that offers investment, advisory, and asset-management services to encourage private-sector development in developing countries. The IFC is a member of the World Bank Group and is headquartered in Washington, D.C. in the United States. It was established in 1956, as the private-sector arm of the World Bank Group, to advance economic development by investing in for-profit and commercial projects for poverty reduction and promoting development. Since 2009, the IFC has focused on a set of development goals that its projects are expected to target. Its goals are to increase sustainable agriculture opportunities, improve healthcare and education, increase access to financing for microfinance and business clients, advance infrastructure, help small businesses grow revenues, and invest in climate health. Hence, all statements are correct.

Answer: A

Explanation:

Answer: (A)

Explanation: The main difference between revenue receipts and capital receipts is that in the case of revenue receipts, government is under no future obligation to return the amount, i.e., they are non-redeemable. But in case of capital receipts which are borrowings, government is under obligation to return the amount along with Interest. Hence, statement 1 is correct.

Capital receipts may be debt creating or non-debt creating. Examples of debt creating receipts are—Net borrowing by government at home, loans received from foreign governments, borrowing from RBI. Examples of non-debt capital receipts are—Recovery of loans, proceeds from sale of public enterprises (i.e., disinvestment), etc. These do not give rise to debt. Hence, statement 2 is incorrect.

Answer: B

Explanation:

Answer: (B)

Explanation:

In the forex market, the supply of rupees is determined by the demand for imports and various foreign assets. So, if there is high demand to import oil, it can lead to an increase in the supply of rupees in the forex market and cause the rupee’s value to drop. The demand for rupees in the forex market, on the other hand, depends on foreign demand for Indian exports and other domestic assets. So, for instance, when there is great enthusiasm among foreign investors to invest in India, it can lead to an increase in the supply of dollars in the forex market which in turn causes the rupee’s value to rise against the dollar.

Appreciation Vs Depreciation:

• In a floating exchange rate system, market forces (based on demand and supply of a currency) determine the value of a currency.


• Currency Appreciation: It is an increase in the value of one currency in relation to another currency.


• Currencies appreciate against each other for a variety of reasons, including government policy, interest rates, trade balances and business cycles.


• Currency appreciation discourages a country’s export activity as its products and services become costlier to buy.

Hence, statement 3 is incorrect.

Answer: C

Explanation:

Answer: (C)

Explanation: Opportunity costs represent the potential benefits that an individual, investor, or business misses out on when choosing one alternative over another. To properly evaluate opportunity costs, the costs and benefits of every option available must be considered and weighed against the others. Opportunity cost is a strictly internal cost used for strategic contemplation; it is not included in accounting profit and is excluded from external financial reporting. For example, a company decides to buy a new piece of manufacturing equipment rather than lease it. The opportunity cost would be the difference between the cost of the cash outlay for the equipment and the improved productivity vs. how much money could have been saved in interest expense had the money been used to pay down debt. Hence, both statements are correct.

Answer: A

Explanation:

Answer: (A)

Explanation: The GDP deflator, also called implicit price deflator, is a measure of inflation. It is the ratio of the value of goods and services an economy produces in a particular year at current prices to that of prices that prevailed during the base year. This ratio helps show the extent to which the increase in gross domestic product has happened on account of higher prices rather than increase in output. Since the deflator covers the entire range of goods and services produced in the economy — as against the limited commodity baskets for the wholesale or consumer price indices — it is seen as a more comprehensive measure of inflation. Hence, statement 2 is incorrect.