CAIIB 2020 Advanced Bank Management Mock Tests Set 3

Which of the following statements most accurately re?ects the law of supply?


Options are :

  • Businesses will produce only the quantity of goods they believe consumers will buy.
  • Consumers will buy more of a good as the price of that good declines.
  • As the price of a good increases, more of that good will be supplied. (Correct)
  • As more inputs are devoted to production, output increases at an ever decreasing rate

Answer :As the price of a good increases, more of that good will be supplied.

CAIIB 2020 Advanced Bank Management Mock Tests Set 8

During an economic contraction:


Options are :

  • Inflation pressures are typically decreasing. (Correct)
  • The unemployment rate typically decreases.
  • Real GDP growth is greater than its sustainable long-term rate.
  • The unemployment rate typically increases.

Answer :Inflation pressures are typically decreasing.

If full employment in the India is 95% and the current rate of unemployment is 6%, which of the following statements is FALSE?


Options are :

  • the natural rate of unemployment is 5%.
  • Structural unemployment is less than 5%.
  • Frictional unemployment is less than 5%.
  • Cyclical unemployment is greater than 5% (Correct)

Answer :Cyclical unemployment is greater than 5%

Which of the following is an example of a government transfer payment?


Options are :

  • Purchase of a new car for the Ministry of Finance ;
  • Funding for a clinic to provide free vaccinations. ;
  • Free food coupons issued to persons in an anti-poverty program. ; (Correct)
  • Funding for a new bridge in an urban area

Answer :Free food coupons issued to persons in an anti-poverty program. ;

CAIIB 2020 Retail Banking Mock Tests Set 15

Narrow Money consists of:


Options are :

  • Currency with the Public, Demand Deposits, 'Other 'Deposits with the RBI (Correct)
  • Currency with the Public, Time Deposits, `Other' Deposits
  • Time deposits, Demand Deposits, 'Other' Deposits with the RBI
  • Currency with the Public, Demand Deposits

Answer :Currency with the Public, Demand Deposits, 'Other 'Deposits with the RBI

The net factor income earned within the domestic territory of a country must be equal to


Options are :

  • Net Domestic Product at factor cost (Correct)
  • Net Domestic Product at market price
  • Net National Product at market price
  • Personal income.

Answer :Net Domestic Product at factor cost

The expansion phase of a business cycle is least likely characterized by:


Options are :

  • Increasing unemployment. (Correct)
  • Increasing inflationary pressures.
  • A positive rate of economic growth.
  • Decreasing Unemployment

Answer :Increasing unemployment.

CAIIB 2020 Advanced Bank Management Mock Tests Set 8

Unemployment that arises when there is a general downturn in business activity is known as


Options are :

  • Frictional unemployment
  • Structural unemployment
  • Cyclical unemployment (Correct)
  • Disguised unemployment

Answer :Cyclical unemployment

Assume that nominal GDP for 2004 was ?11,466 crores. If the GDP de?ator for 2000 (base year) was 100, and the de?ator for 2004 is 107.24,what is real GDP for 2004?


Options are :

  • ?12,296 crores.
  • ?11,668 crores.
  • ?11,267 crores.
  • ?10,692 crores. (Correct)

Answer :?10,692 crores.

Full employment is the level at which there is


Options are :

  • Zero unemployment
  • Normal rate of unemployment
  • Lease supply of labor (Correct)
  • Demand for goods is less than supply

Answer :Lease supply of labor

CAIIB 2020 Bank Financial Management Mock Tests Set 2

Which of the following best describes the Keynesian cause-effect chain of an easy money policy?


Options are :

  • an increase in the money supply will lower the interest rate, increase investment spending, and increase GDP (Correct)
  • an increase in the money supply will raise the interest rate, decrease investment spending, and decrease GDP
  • a decrease in the money supply will raise the interest rate, decrease investment spending, and decrease GDP
  • a decrease in the money supply will lower the interest rate, increase investment spending, and increase GDP

Answer :an increase in the money supply will lower the interest rate, increase investment spending, and increase GDP

Natural rate of unemployment increases due to


Options are :

  • Payroll employment turning from positive to negative.
  • The highest level of economic output during the cycle.
  • Decreasing inflation pressure.
  • Increasing inflation pressure. (Correct)

Answer :Increasing inflation pressure.

A peak in the business cycle is most likely associated with:


Options are :

  • Payroll employment turning from positive to negative.
  • The highest level of economic output during the cycle. (Correct)
  • Decreasing inflation pressure.
  • Increasing inflation pressure.

Answer :The highest level of economic output during the cycle.

CAIIB 2020 Retail Banking Mock Tests Set 2

According to Keynesian school theory, business cycles are caused by:


Options are :

  • Changes in technology over time.
  • Inappropriate variations in the growth of the money supply.
  • Excessive optimism or pessimism among business managers. (Correct)
  • Change in Inflation

Answer :Excessive optimism or pessimism among business managers.

If the actual rate of unemployment exceeds the natural rate of unemployment then


Options are :

  • The actual output of the economy will fall below its potential ;
  • Production will increase more than potential ;
  • Consumption of goods decreases;
  • Both (a) and (c) above. (Correct)

Answer :Both (a) and (c) above.

Shifts in Supply means-:


Options are :

  • When changes in factors other than goods own price affect the quantity supplied. (Correct)
  • When changes in goods own price affect the quantity supplied.
  • Both (1) and (2)
  • None of these

Answer :When changes in factors other than goods own price affect the quantity supplied.

CAIIB 2020 Retail Banking Mock Tests Set 13

Unemployment that arises due to the regional occupational pattern of job vacancies, which does not match the pattern of workers availability and suitability, is known as


Options are :

  • Frictional unemployment
  • Structural unemployment (Correct)
  • Cyclical unemployment ;
  • Demand-pull unemployment.

Answer :Structural unemployment

Disguised unemployment means


Options are :

  • Unemployment in agriculture
  • Unemployment due to the recession
  • Unemployment due to the downturn in business activity (Correct)
  • Marginal Productivity of Labor (MPL) is zero.

Answer :Unemployment due to the downturn in business activity

Which of the following statements is most accurate? Cost-push inflation:


Options are :

  • Often occurs because of an increase in short-run aggregate supply.
  • Typically results from a significant price increase in a production input. (Correct)
  • Results from excess short-run aggregate demand.
  • Results from increasing Unemployment rate

Answer :Typically results from a significant price increase in a production input.

CAIIB 2020 Bank Financial Management Mock Tests Set 5

Which of the following is the least likely one of the types of unemployment?


Options are :

  • Temporal. (Correct)
  • Structural.
  • Frictional.
  • Cyclical.

Answer :Temporal.

Consider two countries, A and B. Country A is a closed country with a relative abundance of labor and holds a comparative advantage in the production of textiles. Country B has a relative abundance of capital. When the textile trade is opened between the two countries, Country A will most likely experience a favorable impact on:


Options are :

  • labor. (Correct)
  • capital.
  • both capital and labor.

Answer :labor.

Unemployment that is caused by a mismatch between the composition of the labor force (in terms of skills, occupation, industries, or geographic location) and the make-up of the demand for labor is called


Options are :

  • Real wage unemployment
  • Deficient-demand unemployment;
  • Frictional unemployment
  • Structural Unemployment (Correct)

Answer :Structural Unemployment

CAIIB 2020 Retail Banking Mock Tests Set 14

Which of the following is least likely to be the result of a minimum wage?


Options are :

  • Labor will be substituted for capital. (Correct)
  • There will be an abundance of low skilled workers willing to work
  • On the job training will be cut back.

Answer :Labor will be substituted for capital.

If the balance on current and capital accounts of Balance of Payments (BoP) taken together is negative, then


Options are :

  • It is a case of BoP surplus
  • It is a case of BoP surplus where the official reserve account is in surplus
  • It is a case of BoP deficit (Correct)
  • It is a case of BoP disequilibrium

Answer :It is a case of BoP deficit

Which of the following most accurately describes society's allocation of resources to the production of goods with external costs or external benefits, respectively?


Options are :

  • Over allocation? under allocation. (Correct)
  • Over allocation? over allocation.
  • Under allocation? over allocation.

Answer :Over allocation? under allocation.

CAIIB 2020 Retail Banking Mock Tests Set 9

In the Union Budget, profits from public sector undertakings are taken under


Options are :

  • Revenue receipts (Correct)
  • Capital receipts
  • Monetized receipts
  • Planned expenditure

Answer :Revenue receipts

The Fiscal Responsibility and Budget Management Act (FRBM Act), a committee set up in January 2000, was headed by ____.


Options are :

  • M Narasimham
  • Dr. E A S Sarma (Correct)
  • Mr. R Raghawan
  • Mr. A. K. Choudhary

Answer :Dr. E A S Sarma

If a firms cost of raw material increases then


Options are :

  • The market price of the final product will also increase
  • The equilibrium level of quantity also increases
  • Marginal cost curve will shift upward (Correct)
  • Marginal cost curve will shift downward

Answer :Marginal cost curve will shift upward

CAIIB 2020 Retail Banking Mock Tests Set 4

Changes in the level and composition of taxation and government spending can have an impact on the following variables in the economy. Pick up the odd one.


Options are :

  • Aggregate demand and the level of economic activity
  • The pattern of resource allocation
  • The proper utilization of funds (Correct)
  • The distribution of income

Answer :The proper utilization of funds

A decrease in price will result in an increase in total revenue if


Options are :

  • Percentage change in quantity demanded is greater than the percentage change in price (Correct)
  • Percentage change in quantity demanded is less than the percentage change in price
  • Percentage change in quantity demanded is equal to the percentage change in price
  • None

Answer :Percentage change in quantity demanded is greater than the percentage change in price

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