The term 'Special Drawing Rights' (SDRs) is associated with: MCQ with Answer and Explanation

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The term 'Special Drawing Rights' (SDRs) is associated with:

A. Asian Development Bank

B. World Trade Organisation

C. World Bank

D. International Monetary Fund

Answer: Option D

Solution (By JKSSB Mock Tests)

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

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Question #1

The concept of 'Sudden Stop' in international finance refers to:

A. A gradual reduction in capital flows

B. Only a stop in domestic investment

C. An abrupt reversal of capital inflows into a country

D. Only a stop in trade flows

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Correct Answer: Option C

Explanation:
A sudden stop is a large and abrupt reversal of capital inflows, often associated with currency crises, output collapses and balance-sheet problems in emerging markets.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of monetary policy, 'Forward Guidance' refers to:

A. Only reserve requirements

B. Only quantitative easing

C. Communication by the central bank about the likely future path of policy rates

D. Only changes in the current policy rate

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Correct Answer: Option C

Explanation:
Forward guidance is a policy tool in which the central bank communicates its intentions regarding the future path of the policy rate or other policy instruments in order to influence longer-term rates and expectations.

This question belongs to: Economy GK Economy Set 1

Question #3

A Special Economic Zone is a geographical region with:

A. liberal economic laws to promote exports and investment

B. higher tariffs than the rest of the country

C. no private sector activity

D. complete prohibition of imports

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Correct Answer: Option A

Explanation:
SEZs have more liberal economic laws to promote exports and investment.

This question belongs to: Economy GK Economy Set 1

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