The 'original sin' problem in international finance refers to: MCQ with Answer and Explanation

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The 'original sin' problem in international finance refers to:

A. inability of emerging economies to borrow abroad in their own currency

B. trade deficits

C. currency depreciation

D. high domestic debt

Answer: Option A

Solution (By JKSSB Mock Tests)

Original sin is the inability of emerging economies to borrow abroad in their own domestic currency.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Macroprudential Policy' aims at:

A. Only price stability

B. Only the soundness of individual institutions

C. Only fiscal sustainability

D. Limiting systemic risk and ensuring the stability of the financial system as a whole

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Correct Answer: Option D

Explanation:
Macroprudential policy uses regulatory and supervisory tools to mitigate systemic risk and to increase the resilience of the financial system as a whole, complementing microprudential supervision of individual institutions.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Trade Facilitation Agreement' of WTO entered into force in which year?

A. 2018

B. 2013

C. 2017

D. 2019

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Correct Answer: Option C

Explanation:
The Trade Facilitation Agreement entered into force in 2017.

This question belongs to: Economy GK Economy Set 1

Question #3

Inflation-indexed bonds provide investors protection against:

A. inflation by linking principal or interest to a price index

B. income tax

C. exchange rate fluctuations

D. market risk

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Correct Answer: Option A

Explanation:
Inflation-indexed bonds link principal or interest payments to inflation, protecting investors from inflation.

This question belongs to: Economy GK Economy Set 1

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