The 'Fiscal Responsibility and Budget Management Act' applies to: MCQ with Answer and Explanation

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The 'Fiscal Responsibility and Budget Management Act' applies to:

A. Central Government

B. RBI only

C. State governments only

D. Private companies

Answer: Option A

Solution (By JKSSB Mock Tests)

The FRBM Act primarily applies to the Central Government.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Bank for International Settlements' is headquartered in:

A. London

B. Zurich

C. Geneva

D. Basel

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Correct Answer: Option D

Explanation:
The Bank for International Settlements is headquartered in Basel, Switzerland.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of banking regulation, the Capital Adequacy Ratio is prescribed to ensure that:

A. CRR is fixed at a particular level

B. Banks maintain adequate capital relative to their risk-weighted assets

C. Dividend distribution is unrestricted

D. Interest rates on deposits are maximised

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Correct Answer: Option B

Explanation:
The Capital Adequacy Ratio requires banks to hold a minimum amount of capital in proportion to their risk-weighted assets so that they can absorb losses and protect depositors.

This question belongs to: Economy GK Economy Set 1

Question #3

For a normal good, a fall in its price creates:

A. negative income effect only

B. zero income effect

C. negative substitution effect

D. positive substitution effect and positive income effect

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Correct Answer: Option D

Explanation:
For a normal good, both substitution effect and income effect work in the same direction when price falls, increasing quantity demanded.

This question belongs to: Economy GK Economy Set 1

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