Daily GK Challenge

More practice: Indian Economy & Banking Awareness

5 more SSC CGL questions from the same chapter, with step-by-step solutions. Try each one, then reveal the answer.

1. Q1easy

   The reverse repo rate is the rate at which:

   • AThe RBI borrows money from commercial banks
   • BCommercial banks borrow money from the RBI
   • CThe government borrows from the public through bonds
   • DCommercial banks lend to their best corporate customers
   Show answer & solution

   Correct answer: (A) The RBI borrows money from commercial banks

   Repo rate is the rate at which the RBI lends to commercial banks against government securities. 'Reverse' flips the direction: banks park their surplus funds with the RBI, so the RBI is the borrower. Raising it pulls money out of the system. So the reverse repo rate is the rate at which the RBI borrows from commercial banks.

2. Q2easy

   The Gini coefficient is used to measure:

   • AThe rate of inflation
   • BThe level of unemployment
   • CInequality in the distribution of income
   • DThe growth rate of GDP
   Show answer & solution

   Correct answer: (C) Inequality in the distribution of income

   The Gini coefficient is calculated from the Lorenz curve. It ranges from 0 (perfect equality: everyone has the same income) to 1 (perfect inequality: one person has all the income). A higher value means a more unequal society. So it measures inequality in income distribution.

3. Q3easy

   Stagflation refers to an economic situation in which:

   • APrices fall continuously while output rises
   • BBoth inflation and economic growth are high
   • CThe economy grows fast with stable prices
   • DHigh inflation exists along with slow growth and high unemployment
   Show answer & solution

   Correct answer: (D) High inflation exists along with slow growth and high unemployment

   The word combines 'stagnation' and 'inflation'. Prices keep rising while output growth is slow or stagnant and unemployment is high, which makes it hard to fix with normal policy. A continuous fall in prices is deflation, not stagflation. So stagflation is high inflation with slow growth and high unemployment.

4. Q4medium

   The share of their net demand and time liabilities (NDTL) that banks must keep with themselves in the form of cash, gold or approved government securities is called the:

   • AStatutory Liquidity Ratio
   • BBank Rate
   • CCash Reserve Ratio
   • DMarginal Standing Facility
   Show answer & solution

   Correct answer: (A) Statutory Liquidity Ratio

   The Cash Reserve Ratio (CRR) is kept as a cash balance with the RBI and earns no interest. The Statutory Liquidity Ratio (SLR) is kept by the bank itself in liquid assets: cash, gold or approved government securities. Bank Rate and MSF are lending rates, not reserve ratios. So the answer is the Statutory Liquidity Ratio.

5. Q5medium

   In the Union Budget, fiscal deficit is defined as:

   • ARevenue deficit minus grants for the creation of capital assets
   • BFiscal deficit minus interest payments
   • CTotal expenditure minus total receipts excluding borrowings
   • DRevenue expenditure minus revenue receipts
   Show answer & solution

   Correct answer: (C) Total expenditure minus total receipts excluding borrowings

   Revenue expenditure minus revenue receipts is the revenue deficit. Fiscal deficit minus interest payments is the primary deficit. Revenue deficit minus grants for capital assets is the effective revenue deficit. Fiscal deficit = total expenditure − (revenue receipts + non-debt capital receipts), which shows how much the government must borrow. So fiscal deficit is total expenditure minus total receipts excluding borrowings.