The concept of 'Shadow Banking' refers to: MCQ with Answer and Explanation

The concept of 'Shadow Banking' refers to:
A. Only central-bank operations
B. Only informal moneylenders in rural areas
C. Credit intermediation involving entities and activities outside the regular banking system
D. Only the activities of commercial banks
Answer: Option C
Solution (By JKSSB Mock Tests)
Shadow banking comprises non-bank financial intermediaries and activities that perform bank-like functions—maturity, credit and liquidity transformation—but operate with less regulation and without direct access to central-bank liquidity.

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Practice More Economy Set 1 Questions

Question #1
The concept of 'Universal Basic Income' proposes:
A. Only in-kind transfers
B. Only unemployment insurance for the temporarily jobless
C. Only targeted transfers to the poor conditional on work
D. An unconditional cash transfer paid regularly to all individuals regardless of employment status or income

Correct Answer: Option D


Explanation:
Universal basic income is a policy proposal under which every citizen receives a regular, unconditional sum of money from the government, irrespective of other income or employment status.

This question belongs to: Economy GK Economy Set 1
Question #2
The term 'Special Drawing Rights' (SDRs) is associated with:
A. Asian Development Bank
B. World Bank
C. International Monetary Fund
D. World Trade Organisation

Correct Answer: Option C


Explanation:
Special Drawing Rights are an international reserve asset created by the International Monetary Fund to supplement member countries' official reserves.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'demographic dividend' can be reaped when:
A. elderly population is large
B. working-age population is large and productive
C. birth rate is high
D. dependency ratio is high

Correct Answer: Option B


Explanation:
Demographic dividend arises from a large productive working-age population.

This question belongs to: Economy GK Economy Set 1