Economy

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.

Correct answer: C

Net measures deduct depreciation.

Correct answer: A

I is correct: Transfer payment → Payment without a current good or service in return. It is not government purchase of current production. II is correct: Saving → Income not consumed. Saving is a flow measured over a period.

Correct answer: C

I is incorrect: Capital stock → Assets existing at a point in time. A stock differs from investment measured during a period. II is correct: Disposable personal income → Income available after relevant personal taxes and transfers. It can be consumed or saved.

Correct answer: D

It supplies the benchmark for measuring change.

Correct answer: C

I is correct: Purchasing power parity → Currency comparison based on purchasing a common basket. It adjusts for differences in price levels. II is correct: GDP deflator → Index comparing nominal GDP with real GDP. It reflects prices of domestically produced final output.

Correct answer: D

It is an average and does not describe distribution by itself.

Correct answer: A

I is correct: Net domestic product → GDP minus consumption of fixed capital. Net measures deduct depreciation. II is correct: Intermediate good → Used up or transformed in producing another good. Its value is embodied in the final product.

Correct answer: D

Summing value added avoids double counting.

Correct answer: C

I is correct: Saving → Income not consumed. Saving is a flow measured over a period. II 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.

Correct answer: A

It is not government purchase of current production.