Economy

Correct answer: B

I is incorrect: Structural transformation → Shift in economic activity across sectors. Development often changes employment and output shares. II is incorrect: Human Development Index → Composite of health, education and income dimensions. It is broader than income alone.

Correct answer: C

It can be expressed per worker or per hour.

Correct answer: A

I is incorrect: Current account → External account covering goods, services and income flows. It also includes current transfers. II is incorrect: Currency appreciation → Market rise in a currency's external value. Each unit buys more foreign currency.

Correct answer: C

It includes current and capital/financial transactions.

Correct answer: B

I is correct: Poverty gap → Average shortfall below a poverty threshold under the chosen measure. It captures depth rather than only headcount. II is incorrect: Human Development Index → Composite of health, education and income dimensions. It is broader than income alone.

Correct answer: D

A higher conventional value indicates greater inequality.

Correct answer: C

I is correct: Underemployment → Employment using less labour time or skill than available. A person may be employed yet insufficiently utilised. II is incorrect: Portfolio investment → Investment in financial securities without direct managerial control. It can include shares and bonds.

Correct answer: B

It also includes current transfers.

Correct answer: A

I is correct: Demographic dividend → Potential benefit from a larger working-age population share. Realising it requires productive employment and capabilities. II is incorrect: Currency depreciation → Market fall in a currency's external value. It differs from an official devaluation under a fixed-rate arrangement.

Correct answer: B

It is not the entire population.

Correct answer: C

I is incorrect: Import tariff → Tax imposed on imported goods. It raises the landed cost unless absorbed elsewhere. II is incorrect: Trade balance → Merchandise exports minus merchandise imports. It excludes services from the merchandise measure.

Correct answer: B

It can include shares and bonds.

Correct answer: D

I is incorrect: Structural transformation → Shift in economic activity across sectors. Development often changes employment and output shares. II is incorrect: Labour force → Employed persons plus unemployed persons seeking or available for work under the measure. It is not the entire population.

Correct answer: A

It excludes services from the merchandise measure.

Correct answer: B

I is correct: Structural transformation → Shift in economic activity across sectors. Development often changes employment and output shares. II is incorrect: Currency depreciation → Market fall in a currency's external value. It differs from an official devaluation under a fixed-rate arrangement.

Correct answer: C

A person may be employed yet insufficiently utilised.

Correct answer: C

I is correct: Currency appreciation → Market rise in a currency's external value. Each unit buys more foreign currency. II is incorrect: Underemployment → Employment using less labour time or skill than available. A person may be employed yet insufficiently utilised.

Correct answer: D

I is incorrect: Financial inclusion → Access to useful and affordable formal financial services. It includes appropriate savings, payments, credit and insurance access. II is incorrect: Credit risk → Risk that a borrower does not meet obligations. Default can cause lender losses.

Correct answer: C

I is correct: Inflation targeting → Monetary policy organised around a stated inflation objective. It provides a nominal anchor for policy and expectations. II is incorrect: Collateral → Asset pledged to secure a loan. The lender may have rights over it if contractual conditions are breached.

Correct answer: A

The central bank pays for securities it buys.

Correct answer: D

I is correct: Time deposit → Deposit placed for an agreed period. It differs from a balance freely payable on demand. II is incorrect: Store of value → Money's role in transferring purchasing power over time. Inflation can reduce that stored purchasing power.

Correct answer: C

I is incorrect: Cash reserve ratio → Specified share of relevant bank liabilities kept with the RBI. It is a reserve requirement rather than a lending rate. II is incorrect: Demand deposit → Bank deposit withdrawable on demand. Savings and current account balances are common examples.

Correct answer: B

It provides collateralised short-term funding.

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: Medium of exchange → Money's role in making payments. It avoids the need for a double coincidence of wants.

Correct answer: C

I is correct: Legal tender → Money recognised by law for discharging specified debts. Its legal status is distinct from every privately accepted payment instrument. II is incorrect: Open market purchase by a central bank → Can inject liquidity into the banking system. The central bank pays for securities it buys.