Capital account convertibility means: MCQ with Answer and Explanation

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Capital account convertibility means:

A. free conversion of the rupee for current account transactions only

B. fixed exchange rate

C. free conversion of the rupee into foreign currency for capital account transactions

D. abolition of all capital controls

Answer: Option C

Solution (By JKSSB Mock Tests)

Capital account convertibility allows free conversion of the rupee for capital account transactions.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of public finance, 'Vertical Fiscal Imbalance' refers to:

A. Imbalance between capital and revenue budgets only

B. Imbalance between revenue and expenditure of the same level of government

C. Mismatch between revenue-raising powers and expenditure responsibilities across different levels of government

D. Only the primary deficit

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Correct Answer: Option C

Explanation:
Vertical fiscal imbalance arises when the revenue powers and expenditure responsibilities of different tiers of government (Centre and States) are mismatched.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'corruption perception index' is published by:

A. Transparency International

B. WEF

C. IMF

D. World Bank

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Correct Answer: Option A

Explanation:
Transparency International publishes the Corruption Perceptions Index.

This question belongs to: Economy GK Economy Set 1

Question #3

Deadweight loss in economics refers to:

A. depreciation of capital

B. loss of total welfare due to market inefficiency

C. loss suffered by a monopolist

D. loss of revenue to the government

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Correct Answer: Option B

Explanation:
Deadweight loss is the loss of economic welfare due to inefficiency such as taxes, price controls or monopoly.

This question belongs to: Economy GK Economy Set 1

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