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Generate QuizEconomics – Fill in the Blank – GK Questions
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The apex governing body of the NITI Aayog, which includes the Prime Minister and the Chief Ministers of all states and Union Territories with legislatures, is known as the ___.
- Governing Council
- 266 (or 266(3))
- durable (or capital / physical)
- notice
Answer: Governing Council
The Governing Council is the premier body tasked with evolving a shared vision of national priorities and strategies. It embodies the principle of 'cooperative federalism' by providing a direct, high-level platform where state leaders can interact with the Centre as equals, rather than being dictated to by a top-down planning authority.
In the GST regime, Integrated GST (IGST) is levied by the Centre on inter-state supply of goods and services. The revenue collected under IGST is ultimately apportioned based on the ___ principle, ensuring the tax reaches the consuming state.
- seigniorage
- Paper Gold
- government spending (or autonomous expenditure)
- destination
Answer: destination
GST is a destination-based consumption tax. When goods move from State A to State B, the Centre collects IGST. However, since the goods are consumed in State B, the Centre retains its share and transfers the remainder to State B (the destination state), ensuring that manufacturing states do not unfairly hoard the tax revenues generated by consuming states.
When the Parliament is unable to pass the full Union Budget before the start of the new financial year due to elections or time constraints, it grants the executive a temporary authorization to incur expenditure, commonly known as a ___.
- Washington
- indirect
- Vote on Account
- first
Answer: Vote on Account
A Vote on Account is a constitutional provision (Article 116) that allows the government to withdraw funds from the Consolidated Fund of India for a limited period (usually two months) to keep essential administrative and developmental machinery running. It only covers the estimated expenditure side, not the new taxation proposals, which are debated in the full budget later.
The IS-LM model, which illustrates the intersection of the real economy (goods market) and the monetary economy (money market), was developed by John Hicks and Alvin Hansen as a mathematical interpretation of the theories of ___.
- India Debt Resolution Company Ltd (IDRCL)
- lending (or credit)
- Capital
- John Maynard Keynes
Answer: John Maynard Keynes
While Keynes published his revolutionary 'General Theory' in 1936, it was highly conceptual and literary. Hicks and Hansen formalized Keynes's ideas into the IS (Investment-Savings) and LM (Liquidity preference-Money supply) framework, creating the foundational macroeconomic model used to analyze the effects of fiscal and monetary policy on national income and interest rates.
To address the risk of excessive leverage that risk-based capital ratios might miss, Basel III introduced a non-risk-based ___ Ratio, calculated as Tier 1 Capital divided by the bank's total consolidated exposure.
- NPCI (or National Payments Corporation of India)
- Leverage
- multiplier
- National Income
Answer: Leverage
During the 2008 financial crisis, many banks maintained healthy risk-based capital ratios while simultaneously taking on massive, hidden leverage through off-balance-sheet vehicles. The Leverage Ratio acts as a strict backstop, limiting the overall degree to which a bank can multiply its equity through borrowing, regardless of how 'safe' the underlying assets are rated.
The ___ Dilemma describes the inherent paradox where a country issuing the global reserve currency (like the US Dollar) must run persistent current account deficits to supply the world with liquidity, which eventually undermines confidence in that very currency.
- Triffin
- seigniorage
- Total variable cost
- stagflation
Answer: Triffin
Proposed by economist Robert Triffin in the 1960s, this dilemma highlighted the fatal flaw in the Bretton Woods system. To facilitate global trade, the US had to pump dollars into the global economy via deficits, but doing so meant US gold reserves could no longer fully back the outstanding dollars, ultimately leading to the collapse of the gold standard in 1971.
The 'Washington Consensus' refers to a set of ten economic policy prescriptions, including fiscal discipline, trade liberalization, and privatization, that were traditionally promoted for developing countries by Washington-based institutions like the IMF, World Bank, and the ___.
- 75
- two
- Consumer Price Index (CPI)
- US Treasury
Answer: US Treasury
Coined by economist John Williamson in 1989, the Washington Consensus represented the dominant neoliberal paradigm of the late 20th century. It advocated for free markets, deregulation, and minimal state intervention. In recent years, it has faced severe criticism for ignoring institutional realities and social safety nets, leading to a shift toward more nuanced, context-specific development strategies.
The concept of 'Jobless Growth' refers to a macroeconomic phenomenon where a country's Gross Domestic Product (GDP) expands significantly, but the ___ remains stagnant or fails to generate proportional employment opportunities.
- employment elasticity (or labor market)
- snob
- notice
- Paper Gold
Answer: employment elasticity (or labor market)
Jobless growth typically occurs when economic expansion is driven by capital-intensive sectors (like heavy manufacturing or high-end IT) or rapid automation, rather than labor-intensive sectors (like textiles or agriculture). This creates a severe structural imbalance where the wealth of the nation grows, but the masses do not see corresponding improvements in livelihoods or wage employment.
In the context of sovereign debt, a '___ Bond' is specifically issued by a government or corporation to raise capital exclusively for financing projects that have positive environmental or climate-related benefits.
- Rules
- Green
- 279A
- Governing Council
Answer: Green
Green Bonds have gained immense traction globally as nations transition toward net-zero emissions. The funds raised are strictly ring-fenced and audited for use in renewable energy, clean transportation, or sustainable water management projects. The RBI and the Government of India have recently started issuing Sovereign Green Bonds to fund public sector sustainability initiatives.
The 'Gig Economy' is characterized by short-term contracts or freelance work as opposed to permanent jobs, and the workers participating in this ecosystem are legally and economically classified as ___ workers.
- 1965
- indifference
- middle-income (and creditworthy low-income)
- gig
Answer: gig
Gig workers, such as ride-hailing drivers or food delivery partners, operate outside the traditional employer-employee relationship. While this model offers flexibility, it raises significant economic and policy challenges regarding the lack of social security, health insurance, and job stability, prompting recent government initiatives to draft welfare codes specifically for unorganized and gig workers.
The 'Fiscal Multiplier' measures the ratio of the change in national income to the initial change in ___ that caused it.
- six
- Demand deposits
- government spending (or autonomous expenditure)
- below
Answer: government spending (or autonomous expenditure)
When the government injects a certain amount of money into the economy (e.g., building a highway), that money becomes income for workers, who then spend a portion of it, creating income for others. The fiscal multiplier quantifies this ripple effect, showing how an initial $1 of government spending can ultimately generate more than $1 in total GDP growth.
The phenomenon where inflation pushes taxpayers into higher income tax brackets, resulting in an increase in their tax burden without any actual increase in their real purchasing power, is known as ___.
- not (or never)
- 41
- Paris
- bracket creep (or fiscal drag)
Answer: bracket creep (or fiscal drag)
Bracket creep occurs in progressive tax systems where tax brackets are not indexed to inflation. As nominal wages rise merely to keep pace with inflation, individuals are pushed into higher marginal tax rates. This stealthily increases government revenue at the expense of the taxpayer's real disposable income, acting as a hidden tax.
The 'Ease of Doing Business' index, which was historically published by the World Bank and used to rank countries on regulatory efficiency, was discontinued in 2021 due to data irregularities and is being replaced by a new framework called ___.
- Consumer Price Index (CPI)
- B-READY (or Business Ready)
- gig
- NPCI (or National Payments Corporation of India)
Answer: B-READY (or Business Ready)
The World Bank scrapped the flagship Ease of Doing Business report following an ethics audit that revealed data manipulation in previous editions. To restore credibility, the Bank launched the 'Business Ready' (B-READY) project, which aims to evaluate the business environment with a more robust, transparent, and balanced methodology that includes labor rights and environmental sustainability.
To provide long-term, patient capital for India's massive infrastructure needs and to avoid the asset-liability mismatches faced by commercial banks, the government established the ___ in 2021.
- banks
- snob
- capital
- NaBFID (or National Bank for Financing Infrastructure and Development)
Answer: NaBFID (or National Bank for Financing Infrastructure and Development)
NaBFID was set up as a specialized Development Financial Institution (DFI) with a target to support the National Infrastructure Pipeline. Unlike commercial banks that rely on short-term deposits, NaBFID raises long-term funds from domestic and international capital markets, providing the crucial long-gestation 'patient capital' required for massive, multi-year infrastructure projects.
The economic concept of ___ refers to a state of resource allocation where it is impossible to make any one individual better off without making at least one other individual worse off.
- tangent
- technological
- Refinery Products
- Pareto Efficiency (or Pareto Optimality)
Answer: Pareto Efficiency (or Pareto Optimality)
Named after Italian economist Vilfredo Pareto, this concept defines the absolute maximum efficiency of an economy. When a market reaches Pareto Efficiency, all mutually beneficial trades have been exhausted. Any further reallocation of goods or resources will inevitably harm someone, meaning no net societal welfare can be generated without redistribution.
The 'Bad Bank' or the National Asset Reconstruction Company Ltd (NARCL), set up to aggregate and resolve bad loans from Indian banks, is backed by government guarantees and works in tandem with the ___ for the actual management and recovery of these stressed assets.
- Veblen
- IDRCL (or India Debt Resolution Company Ltd)
- Total receipts excluding borrowings
- 2003
Answer: IDRCL (or India Debt Resolution Company Ltd)
The NARCL is designed to acquire the stressed assets from banks by issuing Security Receipts (SRs). However, the NARCL acts primarily as an aggregator. The actual operational work of managing these bad assets, formulating resolution plans, and executing recoveries is outsourced to the IDRCL, which is majority-owned and managed by private sector professionals.
The economic practice of exporting a product to a foreign market at a price that is lower than the price charged in its home market, or lower than its cost of production, is known as ___.
- dumping
- John Maynard Keynes
- dividend (or window of opportunity)
- substitutes
Answer: dumping
Dumping is considered a predatory and unfair trade practice under WTO rules. It is often used by foreign producers to capture market share or drive domestic competitors out of business. To counter this, importing nations can impose 'Anti-Dumping Duties' to level the playing field and protect their domestic industries from material injury.
When a worker is employed for fewer hours than they are capable of and willing to work, resulting in underutilization of their labor capacity, this specific condition is termed as ___ unemployment.
- Rules
- product
- public
- underemployment
Answer: underemployment
Underemployment is a severe issue in developing economies like India, often manifesting visibly in the gig economy or invisibly in agriculture (disguised unemployment). It means the economy is not generating enough full-time, productive jobs, leading to lower aggregate wages, reduced purchasing power, and wasted human capital potential.
Payments Banks, a new category of niche banks introduced by the RBI based on the Nachiket Mor Committee recommendations, can accept demand deposits but are strictly prohibited from undertaking any ___ activities.
- two
- lending (or credit)
- decrease (or reduce / lower)
- 1999
Answer: lending (or credit)
Payments Banks are designed to provide safe, secure, and widespread payment and remittance services to migrant laborers and low-income households. While they can accept deposits (up to a specified limit) and issue debit cards, they cannot issue credit cards or lend money directly. They must invest their mobilized deposits in safe government securities and SLR-eligible bonds.
The MUDRA Bank, launched to provide funding to the non-corporate, non-farm small/micro enterprises, operates under the tagline 'Funding the ___'.
- inflation
- Rules
- Unfunded
- public
Answer: Unfunded
MUDRA stands for Micro Units Development and Refinance Agency. Its core mandate is to 'Fund the Unfunded' by providing institutional credit to millions of small entrepreneurs, street vendors, and artisans who traditionally fall outside the purview of formal banking channels and rely on exorbitant informal moneylenders.