The 'Special Drawing Right' value is calculated based on a basket of currencies that includes which five currencies? MCQ with Answer and Explanation

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The 'Special Drawing Right' value is calculated based on a basket of currencies that includes which five currencies?

A. US dollar, euro, yen, pound, rupee

B. US dollar, euro, yen, pound, yuan

C. US dollar, euro, rupee, pound, yen

D. US dollar, euro, franc, pound, yuan

Answer: Option B

Solution (By JKSSB Mock Tests)

The SDR basket comprises US dollar, euro, Chinese yuan, Japanese yen and British pound.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Accelerator Principle' states that:

A. Consumption depends on the rate of interest

B. Investment depends on the level of income

C. Saving depends only on income

D. Investment depends on the rate of change of income or output

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Correct Answer: Option D

Explanation:
The accelerator principle posits that net investment is a function of the change in output or income; a rise in demand induces a multiple increase in investment.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'systemically important financial institution' is one whose failure could:

A. have no effect on the economy

B. trigger a systemic crisis

C. benefit other banks

D. reduce inflation

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Correct Answer: Option B

Explanation:
A systemically important institution is too big or interconnected to fail without causing systemic risk.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a component of revenue expenditure of the government?

A. Expenditure on acquisition of land

B. Interest payments

C. Loans to state governments

D. Expenditure on construction of roads

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Correct Answer: Option B

Explanation:
Revenue expenditure does not create assets or reduce liabilities. Interest payments are a major component of revenue expenditure. Acquisition of land, loans and construction create assets and are capital expenditure.

This question belongs to: Economy GK Economy Set 1

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