interview question and answers tell me about yourself interview question general interview question sample interview question bank ssc defence interview question interview question for fresher weakness Balance of Trade personal interview question Jago Grahak Jago Soft Currency
1. What is Balance of Trade?
The value of a country’s exports minus the value of its
imports. Unless specified as the balance of merchandise trade, it normally
incorporates trade in services, including earnings (interest, dividends, etc.)
on financial assets.
2. What is Balanced Trade?
When A balance of trade equal to zero. (exports-imports=0)
3. What is Balance of merchandise trade?
The value of a country’s merchandise exports minus the value
of its merchandise imports.
4. What is a favorable balance of trade?
It is the difference between exports and imports. Debit
items include imports, foreign aid, domestic spending abroad and domestic
investments abroad. Credit items include exports, foreign spending in the
domestic economy and foreign investments in the domestic economy. A country has
a trade deficit if it imports more than it exports; the opposite scenario is a
trade surplus.
5. What is Balance of Payments?
A list, or accounting, of all of a country’s international
transactions for a given time period, usually one year. Payments into the
country (receipts) are entered as positive
numbers, called credits; payments out of the country
(payments) are entered as negative numbers called debits. A single number
summarizing all of a country’s international transactions: the balance of
payments surplus.
6. What is Balance of payments adjustment mechanism?
Any process, especially any automatic one, by which a
country with a payments imbalance moves toward balance of payments equilibrium
7. What is Monopolistic Competition?
A market structure in which there are many sellers each
producing a differentiated product. Each can set its own price and quantity,
but is too small for that to matter for prices and quantities of other
producers in the industry.
8. What is MFN?
MFN stands for Most Favoured Nation. The principle,
fundamental to the GATT, of treating imports from a country on the same basis
as that given to the most favored other nation. That is, and with some
exceptions, every country gets the lowest tariff that any country gets, and
reductions in tariffs to one country are provided also to others.
9. What is Gold Standard?
A monetary system in which both the value of a unit of the
currency and the quantity of it in circulation are specified in terms of gold.
If two currencies are both on the gold standard, then the exchange rate between
them is approximately determined by their two prices in terms of gold.
10. What is Balance on capital account?
A country’s receipts minus payments for capital account
transactions.
11. What is Balance on current account ?
A country’s receipts minus payments for current account
transactions. Equals the balance of trade plus net inflows of transfer
payments.
12. What is a Balanced budget ?
A government budget surplus that is zero, thus with net tax
revenue equaling expenditure. A balanced budget change in policy or behavior is
one in which a component of the government budget, usually taxes, is budget
change in policy or behavior is one in which a component of the government
budget, usually taxes, is adjusted as necessary to maintain a balanced budget.
13. What is balanced growth of an Economy?
Growth of an economy in which all aspects of it, especially
factors of production, grow at the same rate.
14. What is a Bank rate
The interest rate charged by a central bank to commercial
banks for very short term loans.
15. What is a Repo?
Repo is “Repurchase Agreement. An agreement to sell a
security for a specified price and to buy it back later at another specified
price. A repo is essentially a secured loan.
16. What is Repo Rate?
Whenever the banks have any shortage of funds they can
borrow it from RBI. Repo rate is the rate at which our banks borrow rupees from
RBI. A reduction in the repo rate will help banks to get money at a cheaper
rate. When the repo rate increases borrowing from RBI becomes more expensive.
On March 4, 2009 it was 5% in India (please check the latest figure by RBI)
17. What is CRR Rate in India?
Cash reserve Ratio (CRR) is the amount of funds that the
banks have to keep with RBI. If RBI decides to increase the percent of this,
the available amount with the banks comes down. RBI is using this method
(increase of CRR rate), to drain out the excessive money from the banks.
18. What is a Reverse Repo Rate?
Reverse Repo rate is the rate at which Reserve Bank of India
(RBI) borrows money from banks. Banks are always happy to lend money to RBI
since their money are in safe hands with a good interest. An increase in
Reverse repo rate can cause the banks to transfer more funds to RBI due to this
attractive interest rates. It can cause the money to be drawn out of the
banking system. Due to this fine tuning of RBI using its tools of CRR, Bank
Rate, Repo Rate and Reverse Repo rate our banks adjust their lending or
investment rates for common man. On March 4, 2009 Reverse Repo Rate is 3.5%
(please check latest rate by RBI)
19. What is SLR Rate?
SLR (Statutory Liquidity Ratio) is the amount a commercial
bank needs to maintain in the form of cash, or gold or govt. approved
securities (Bonds) before providing credit to its customers. SLR rate is
determined and maintained by the RBI (Reserve Bank of India) in order to
control the expansion of bank credit.
20. How is SLR determined?
SLR is determined as the percentage of total demand and
percentage of time liabilities. Time Liabilities are the liabilities a
commercial bank liable to pay to the customers on their anytime demand. .
21. What is the Need of SLR?
With the SLR (Statutory Liquidity Ratio), the RBI can ensure
the solvency a commercial bank. It is also helpful to control the expansion of
Bank Credits. By changing the SLR rates, RBI can increase or decrease bank
credit expansion. Also through SLR, RBI compels the commercial banks to invest
in government securities like government bonds.
22. What is the main use of SLR?
SLR is used to control inflation and propel growth. Through
SLR rate tuning the money supply in the system can be controlled efficiently.
23. What is Inflation in India?
Increase in the overall price level of an economy, usually
as measured by the CPI /WPI or by the implicit price deflator. Inflation is as
an increase in the price of bunch of Goods and services that projects the
Indian economy. An increase in inflation figures occurs when there is an
increase in the average level of prices in Goods and services. Inflation
happens when there are less Goods and more buyers, this will result in increase
in the price of Goods, since there is more demand and less supply of the goods.
24. What is Deflation?
A fall in the general level of prices. Unlikely unless the
rate of inflation is already low, it may then be due either to a surge in
productivity or, less favorably, to a recession. Deflation is the continuous
decrease in prices of goods and services. Deflation occurs when the inflation
rate becomes negative (below zero) and stays there for a longer period.
25. What is a Barter economy?
An economic model of international trade in which goods are
exchanged for goods without the existence of money. Most theoretical trade
models take this form in order to abstract from macroeconomic and monetary
considerations.
26.What is Basel I?
Also known at Basel Capital Accord, this was an agreement in
1988 by the Basel Committee of central bankers to measure the credit risk of
commercial banks and set minimum standards for bank capital in order to reduce
the likelihood of international repercussions due to bank failures.
27.What is Basel II?
The Basel II Framework describes a more comprehensive
measure and minimum standard for capital adequacy that national supervisory
authorities are now working to implement through domestic rule-making and
adoption procedures. It seeks to improve on the existing rules by aligning regulatory
capital requirements more closely to the underlying risks that banks face. In
addition, the Basel II Framework is intended to promote a more forward-looking
approach to capital supervision, one that encourages banks to identify the
risks they may face, today and in the future, and to develop or improve their
ability to manage those risks. As a result, it is intended to be more flexible
and better able to evolve with advances in markets and risk management
practices.
The efforts of the Basel Committee on Banking Supervision to
revise the standards governing the capital adequacy of internationally active
banks achieved a critical milestone in the publication of an agreed text in
June 2004.
28.What is a Beggar thy neighboUr policy?
For a country to use a policy for its own benefit that harms
other countries. Examples are optimal tariffs and, in a recession, tariffs
and/or devaluation to create employment.
29. What is a Bill of Lading?
This term is normally used in shipping industry. The receipt
given by a transportation company to an exporter when the former accepts goods
for transport. It includes the contract specifying what transport service will
be provided and the limits of liability.
30. What is the use of color boxes in WTO category of
subsidies?
Used with a color, a category of subsidies based on status
in WTO: red=forbidden, amber or orange=go slow, green=permitted, blue=subsidies
tied to production limits. Terminology seems only to be used in agriculture,
where in fact there is no red box.
31. What is a fiscal deficit?
A deficit in the government budget of a country and
represents the excess of expenditure over income. So this is the amount of
borrowed funds required by the government to meet its expenditures completely.
India’s fiscal deficit widened to Rs. 541.58 billion in April, 2009 as compared
to Rs. 329.39 billion rupees in April 2008.
32. What is Black Money ?
Black Money is the unaccounted money concealed from the tax
authorities. The black money runs a parallel economy adversely affecting the
distribution of wealth & income in the economy. The total amount of black
money globally is estimated between $2.1 and 2.5 trillion. This is roughly
about seven percent of the world’s GDP.
33.What is a Black Market?
A black market is an illegal market, in which something is
bought and sold outside of official government sanctioned channels. Black
markets tend to arise when a government tries to fix a price without itself
providing all of the necessary supply or demand. Black markets in foreign exchange
almost always exist when there are exchange controls.
34. What is a blue chip company? Why it is blue color only
used in such companies?
A blue chip is concerned with stocks & shares of
company, which are well established and whose purchase is considered extremely
safe. Due to stable earnings and no extensive liabilities these companies are
called blue chip companies. The term blue chip comes from casinos, where blue
chips stand for counters of the highest value. Most blue
chip stocks pay regular dividends, even when business is
faring worse than usual.
35.What is a direct Tax?
A direct tax is that which is paid directly by someone to
taxing authority. Income tax and property tax are examples of direct tax. They
are not shifted to somebody else.
36.What is an Indirect Tax?
This type of tax is not paid by someone directly to the
authorities and it is actually passed on to the other in the form of increased
cost. They are levied on goods and services produced or purchased. Excise tax,
Sales tax, VAT are indirect taxes.
37.What are LDCs or Least Developed Countries?
Least Developed Countries (LDCs) are countries which as per
United Nations show the lowest indicators of socioeconomic development. They
have lowest Human Development Index ratings of all countries in the world. A
country which has three-year average Gross national Income per capita of less
than US $750 is tagged as LDC. a LDC must have an income of $ 900 to escape
this tag. Besides if thse countries show human resource weakness based on indicators
of nutrition, health, education and adult literacy and also or
economic vulnerability based on instability of economy .
Currently UN has tagged 49 countries in LDC. India is not an LDC.
38.What are Middle Income Countries ?
Middle-income countries (MICs) are the 86 countries that
fall into the middle-income range set by the Bank’s World Development
Indicators. They account for just under half of the world’s population; are
home to onethird of people across the globe living on less than $2 per day; and
are found in all six of the Bank’s geographical regions. They cover a wide
income range, with the highest income MIC having a per capita income 10 times
that of the lowest.
39.What is Policy of Laissez Faire?
Laissez Faire is a French term and means no interference. It
is a doctrine that states that government generally should not intervene in the
marketplace.
40.What is the difference between Monopoly and Monopsony ?
In monopsony only one buyer faces many sellers. So this is
called Buyer’s Monopoly. It is a rare situation in today’s economy. In monopoly
one seller faces many buyers. As the only purchaser of a good or service, the
“monopsonist” may dictate terms to its suppliers in the same manner that a
monopolist controls the market for its buyers.
41.What is the main function of Competition Commission of
India?
CCI is an independent body which become operational w.e.f.
May 20, 2009 and is responsible for investigating the mergers, market shares
& conditions besides regulating firms. CCI will ultimately replace the
Monopolies and Restrictive Trade Practices Commission (MRTPC) of India.
42. What is Lead Bank Scheme?
Lead bank scheme was introduced around 40 years ago and
recently it was in the news as a high level committee chaired by RBI Deputy
Governor Usha Thorat was constituted to review and revitalize this scheme. The
scheme aims at facilitating credit delivery to the farfetched areas ofIndia.
There are members of the committee from NABARD and SIDBI. Thus the scheme
focuses upon financial inclusion. The Opinion of this committee is that full
financial inclusion is possible only if it makes a facility of opening of
no frill accounts backed by other specialized services.
43.What are Nostro & Vostro Accounts ?
A nostro account is maintained by an Indian Bank in the
foreign countries for a facility of easy clearing of their transactions. For
instance, if the bank pays a demand drawn on it by its correspondent bank,
there is no delay because the foreign corresponded bank would already have credited
the nostro account of the paying bank while issuing the demand draft. A vostro
account is maintained by a foreign bank in India with their corresponding bank.
44. From which country India imports maximum?
From China. Import from China was $ 24.16 billion in
2008-09, which got doubled in 3 years. This is 10.3 % of all the imports of
India.
45.What is Gold Standard?
A system of setting currency values whereby the
participating countries commit to fix the prices of their domestic currencies
in terms of a specified amount of gold.
46.What is a Free Float Exchange Rate system?
An exchange rate system characterized by the absence of
government intervention. Also known as a clean float.
47.What are Special Drawing rights SDR?
SDR are new form of international reserve assets, created by
the International Monetary Funds in 1967. The value of SDR is based on a
portfolio of widely used currencies and they are maintained as accounting
entries and not as hard currency or physical assets like Gold.
48.What are the requirements to open a New Branch in Rural
Area?
Since 2006, RBI has approved the opening of new branches
only on the condition that at least half of such branches are opened in
under-banked areas as notified by the regulator.
The opening of branches by banks is governed by the
provisions of Section 23 of the Banking Regulation Act, 1949. In terms of these
provisions, banks cannot open a new place of business inIndia or abroad or
change otherwise than within the same city, town or village, the location of
the existing place of business without the prior approval of the ReserveBank of
India (RBI). Thus, it is mandatory for RRBs to seek prior approval/ license
from Rural Planning and Credit Department (RPCD) of RBI before opening of new
branches/offices.
RRB should fulfill the following conditions to become
eligible for opening of new branches.
1. It should not have defaulted in maintenance of SLR and
CRR during the last two years.
2. The RRB should be making operational profits, its net
worth should show improvement 3. Its net NPA ratio should not exceed 8 per
cent.
49. What is concept sustainable Development?
Meeting the needs of the present without compromising the
ability of future generations to meet their needs is called sustainable
development. This concept is popular in present context of development.
50. What is the meaning of Financial Inclusion?
Today is is well recognized that large population of India
is out of reach of the formal banking services. Financial inclusion is the
concept which has been floated to bring the most of the rural population / area
under the net of the financial and banking services.
51. What is SATMO?
SATMO is Satellite Money Order Service introduced by Postal
Department Govt. of India on December 16, 1994. However this scheme could not
make its headway due to functional complicacies.
52. What is “Vande Mataram Scheme” ?
Vande mataram schem is a nationwide programme aimed at
improving ante and post-natal care–which was launched on February 9, 2004. The
scheme envisages free ante and post-natal check-ups, tips to avoid nutritional
problems and anemia and counseling on small family norm and is a major
initiative in Public Private partnerships during emergency.
53. What is Golden Handshake Scheme?
Golden handshake scheme is a Govt. of India scheme
introduced as a Voluntary retirement Scheme (VRS) in Industrial Policy
Resolution 1991 for reducing the pressure of extra employees on public sector
enterprises.
54. What is India Brand Equity Fund?
This is a scheme to promote Indian Brands in Overseas
Markets with the primary objective of brand
promotion and not export promotion. To make the “Made in
India” label a symbol of quality, competitive price, reliability and service to
the customer & to project India as a reliable supplier of quality goods and
services. It was established on July 11, 1996.
55. What is Jago Grahak Jago”?
The Consumer Awareness Scheme for the XI Plan amounting to a
total of Rs. 409 crores has been approved by the Cabinet Committee on Economic
Affairs on 24.01.08. This scheme has been formulated to give an increased
thrust to a multi media publicity campaign to make consumers aware of their
rights. The slogan ‘Jago Grahak Jago’ is part of the publicity campaign
undertaken in the last few years. ‘Jago Grahak Jago’ has become the focal theme
through which issues concerning the functioning of almost
all Government Departments having a consumer interface can
been addressed. To achieve this objective joint campaigns have been
undertaken/are being undertaken with a number of Government Departments.
56. What is a revolving credit?
Revolving credit is a type of credit that does not have a
fixed number of payments. Corporate revolving credit facilities are typically
used to provide liquidity for a company’s day-to-day operations.The credit
cards are examples of revolving credit. They are renewed automatically until
the notice of cancellation is receieved. The time of repayment is specified.
57. What is Gender Budgeting?
Gender budgeting is the process of conceiving, planning,
approving, executing, monitoring, analyzing and auditing budgets in a
gender-sensitive way. Gender Budgeting is actually an attempt to women
upliftment without any sex discrimination while formulating the policies and
making allocation for them. Gender Budgeting is a process that entails
incorporating a gender perspective at various stages- planning/
policy/ programme formulation, assessment of needs of target
groups, allocation of resources, implementation, impact assessment, reprioritization
of resources.
Gender Responsive Budget and Gender Mainstreaming are
outcomes of Gender Budgeting.
58. What is Soft Currency?
Soft currency is opposite of hard currency and it indicates
a type of currency whose value may depreciate rapidly or that is difficult to
convert into other currencies. Soft currency can be in the form of paper,
electronic or debt-based “IOUs” which have in the past been used in place of
hard currency. This currency has limited convertibility into gold and other
currencies.
59. What are factors of production?
The resources and the inputs which are required to produce a
good or service is called factor of production. The basic categories are land
labor and capital.
60. What is the principle of Diminishing returns?
This principle says that if one factor of production is
fixed and constant additions of other factors are combined with this, the
marginal productivity of variable factors will eventually decline. According to
this relationship, in a production system with fixed and variable inputs (say
factory size and labor), beyond some point, each additional unit of the
variable input yields smaller and smaller increases in output. Conversely,
producing one more unit of output costs more and more in
variable inputs.
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