Economy

Correct answer: C

It differs from cash reserves held with the RBI.

Correct answer: D

I is correct: Unit of account → Money's role as a common measure of value. Prices and accounts use a shared monetary unit. II is incorrect: Medium of exchange → Money's role in making payments. It avoids the need for a double coincidence of wants.

Correct answer: B

The lender may have rights over it if contractual conditions are breached.

Correct answer: D

I is incorrect: Store of value → Money's role in transferring purchasing power over time. Inflation can reduce that stored purchasing power. II is incorrect: Repo transaction → Sale of securities with an agreement to repurchase. It provides collateralised short-term funding.

Correct answer: D

It provides a nominal anchor for policy and expectations.

Correct answer: A

I is incorrect: Statutory liquidity ratio → Specified share of relevant bank liabilities maintained in eligible liquid assets. It differs from cash reserves held with the RBI. II is incorrect: Time deposit → Deposit placed for an agreed period. It differs from a balance freely payable on demand.

Correct answer: D

I is correct: Repo transaction → Sale of securities with an agreement to repurchase. It provides collateralised short-term funding. II is incorrect: Statutory liquidity ratio → Specified share of relevant bank liabilities maintained in eligible liquid assets. It differs from cash reserves held with the RBI.

Correct answer: D

Default can cause lender losses.

Correct answer: B

I is correct: Time deposit → Deposit placed for an agreed period. It differs from a balance freely payable on demand. II is incorrect: Liquidity → Ease of conversion into spendable funds with little loss. Cash is highly liquid.

Correct answer: D

It differs from a balance freely payable on demand.

Correct answer: B

I is incorrect: Liquidity → Ease of conversion into spendable funds with little loss. Cash is highly liquid. II is incorrect: Store of value → Money's role in transferring purchasing power over time. Inflation can reduce that stored purchasing power.

Correct answer: B

I is incorrect: Inflation targeting → Monetary policy organised around a stated inflation objective. It provides a nominal anchor for policy and expectations. II is incorrect: Time deposit → Deposit placed for an agreed period. It differs from a balance freely payable on demand.

Correct answer: B

Cash is highly liquid.

Correct answer: B

I is incorrect: Statutory liquidity ratio → Specified share of relevant bank liabilities maintained in eligible liquid assets. It differs from cash reserves held with the RBI. II is incorrect: Legal tender → Money recognised by law for discharging specified debts. Its legal status is distinct from every privately accepted payment instrument.

Correct answer: C

I is correct: Disposable personal income → Income available after relevant personal taxes and transfers. It can be consumed or saved. II is correct: Saving → Income not consumed. Saving is a flow measured over a period.

Correct answer: B

I is incorrect: Transfer payment → Payment without a current good or service in return. It is not government purchase of current production. II is correct: Value added → Output value minus intermediate input value. Summing value added avoids double counting.

Correct answer: D

Imports are subtracted to avoid counting foreign production.

Correct answer: C

I is correct: Base year → Reference period for an index or constant-price comparison. It supplies the benchmark for measuring change. II is correct: Net domestic product → GDP minus consumption of fixed capital. Net measures deduct depreciation.

Correct answer: B

It measures wear, obsolescence and related loss of asset value.

Correct answer: D

I is correct: Disposable personal income → Income available after relevant personal taxes and transfers. It can be consumed or saved. II is correct: Per capita income → Income aggregate divided by population. It is an average and does not describe distribution by itself.

Correct answer: B

It adjusts for differences in price levels.

Correct answer: A

I is correct: GDP calculated by the expenditure method → Consumption plus investment plus government purchases plus net exports. Imports are subtracted to avoid counting foreign production. II is correct: Capital stock → Assets existing at a point in time. A stock differs from investment measured during a period.

Correct answer: D

I is incorrect: Capital stock → Assets existing at a point in time. A stock differs from investment measured during a period. II is correct: Value added → Output value minus intermediate input value. Summing value added avoids double counting.

Correct answer: A

Residence, rather than production location alone, determines this adjustment.

Correct answer: D

I is incorrect: GDP deflator → Index comparing nominal GDP with real GDP. It reflects prices of domestically produced final output. II is correct: Disposable personal income → Income available after relevant personal taxes and transfers. It can be consumed or saved.