The correct answer is Being a standard of deferred payments.

Key Points

• Functions of Money:
  • The functions of money are divided into two categories: Primary Functions and Secondary Functions.
• Primary Functions:
  • Medium of Exchange:
    • ​It refers to a monetary function in which money is viewed as a means of exchanging goods.
    • The medium of exchange function is regarded as the primary and unique function of money because it solved the primary problem of the barter system of double coincident wants.
  • Measure of Value:
    • ​It refers to a monetary function that aids in determining the value of goods and services. The value of all goods and services is expressed in terms of money.
    • When calculating the monetary value of goods and services, money is used as the common denominator.
• Secondary Functions:
  • Store of Value:
    • Individuals typically keep their wealth in the form of money. As a result, money functions as an asset that retains its value over time.
  • Standard of Deferred Payments:
    • ​It refers to one of the money's most important functions. Loans, salaries, pensions, insurance premiums, interest, and rents are examples of deferred payments.
    • The amount of repaid money must be the same as it was at the time of purchase, which is a necessary condition for deferred payment.
  • Transfer of Value:
    • ​Money's utility extends to the transfer of value because it can be used to purchase goods not only within the country but also beyond its borders.
    • Money as a standard tool can be used to sell or buy goods in the domestic or international market.

Additional Information

The correct answer is Cabinet Committee on Economic Affairs.

Key Points

• Fair and remunerative prices of sugarcane are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP).
• The central government declares fair and remunerative prices.
• These are announced by the Cabinet Committee on Economic Affairs (CCEA).

The correct answer is 1 and 3 only

Key Points

• The Consumer Price Index or CPI is commonly called an index measuring retail inflation in the economy by collecting the change in prices of most common goods and services used by consumers.
• The base Year for WPI is 2011-2012. Hence, pair 1 is correctly matched.
• Wholesale Price Index, or WPI, measures the changes in the prices of goods sold and traded in bulk by wholesale businesses to other businesses.
• The base year for CPI was updated to 2011-12. Hence, pair 2 is incorrectly matched.
• The current base year for the gross domestic product is 2011-12. Hence, pair 3 is correctly matched.

Thus, C is the correct answer.

The correct answer is Only 2 and 5.

Key Points

Union Budget 2023–24:

• Seven priorities(pillars) of the budget ‘Saptarishi’ are
  • inclusive development,
  • reaching the last mile,
  • infrastructure and investment,
  • unleashing the potential,
  • green growth,
  • youth power, and
  • the financial sector.

Additional Information

Union Budget 2023–24:

• The government proposes to spend Rs 45,03,097 crore in 2023-24, which is an increase of 7.5% over the revised estimate of 2022-23.
• The government has estimated a nominal GDP growth rate of 10.5% in 2023-24

UNION BUDGET:

• As per Article 112 of the Constitution, the Union Budget is the statement of estimated receipts and expenditures of the government.
• It is also known as the Annual Financial Statement of the Government.
• The Department of Economic Affairs, Ministry of Finance (MoF), is the nodal body responsible for preparing the budget.
• Aside from the Finance Minister's Budget Speech, the main budget documents that are given to Parliament are the Finance Bill (Article 110), the Annual Financial Statement (Article 112), the Demands for Grants (Article 113), and the Fiscal Policy Statements required by the FRBM Act.

The correct answer is it is regime where a nation's currency is set by the forex market through supply and demand.

Key Points

• A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies.
• It is determined by market forces of demand and supply.
• It is in contrast to a fixed exchange rate.
• In  fixed exchange a currency is pegged or held at the same value relative to another currency.

The correct answer is NNP at market price = GNP at cost price - Cost of depreciation of stock of capital.

Key Points

The true statement is:

NNP at market price = GNP at cost price - Cost of depreciation of stock of capital

Here's a breakdown of the terms and why this relationship holds:

NNP (Net National Product) at market price:

• It measures the total value of all final goods and services produced by a nation's residents in a given period, adjusted for the cost of depreciation.
• It reflects the actual market value of the output, including taxes and subsidies.

GNP (Gross National Product) at cost price:

• It measures the total value of all final goods and services produced by a nation's residents in a given period, but it does not account for depreciation.
• It reflects the factor cost of production, excluding taxes and subsidies.

Cost of depreciation of stock of capital:

• It accounts for the wear and tear of capital goods (machines, buildings, etc.) used in production.
• It's a necessary deduction to arrive at a more accurate measure of net output, as capital goods lose value over time.

Additional Information

Relationship between NNP and GNP:

NNP is always lower than GNP because it subtracts depreciation from GNP.
This subtraction is essential because it recognizes that a portion of GNP is used to replace worn-out capital rather than generating new output.
Explanation of the formula:

NNP at market price starts with GNP at cost price, which captures the total value of production.
To arrive at the net value of production, the cost of depreciation is subtracted, reflecting the portion of output used to maintain existing capital.
The other options are incorrect because:

Adding depreciation to GNP would overestimate NNP.
Transfer earnings are not directly related to the calculation of NNP

The correct answer is the Reserve Bank of India.

Key Points 

• The Reserve Bank of India is the controlling authority of money supply in India. The basic functions of the bank have been described in the Preamble of the Reserve Bank of India as follows:
• To regulate the issue of banknotes, maintain reserves with a view to achieving monetary stability in India and operate the currency and credit system in the interest of the country in general.
• Formulate, implement, and monitor monetary policy.
• To regulate and supervise the financial system.
• Managing foreign exchange.
• Issuing, exchanging currency and destroying them when they are no longer operational.

Thus, the correct answer is the Reserve Bank of India.

Important Points

• Reserve Bank of India
  • The Reserve Bank of India is the central bank of India.
  • It is the operator of all the banks in India.
  • The Reserve Bank controls the economy of India.
  • It was established on 1 April 1935 as per the Reserve Bank of India Act 1934​.
  • Initially, its headquarters was in Kolkata, which shifted to Mumbai in 1937.
  • Earlier it was a private bank but since 1949 it has become a Government of India undertaking.
• Government of India 
  • ​In terms of Section 25 of the RBI Act, 1934 the design of banknotes is required to be approved by the Central Government on the recommendations of the Central Board of the Reserve Bank of India.
  • The responsibility for coinage vests with the Government of India on the basis of the Coinage Act, 2011 as amended from time to time.
  • The Government of India is also responsible for the designing and minting of coins in various denominations.

  • The Government of India in consultation with the Reserve Bank of India decides the design of banknotes.​

• State Bank of India
  • ​SBI was established on July 1, 1955, through an Act of Parliament, by merging the Imperial Bank of India and its then-five subsidiaries.
    Imperial Bank of India was founded in 1847 by European merchants in Calcutta (now Kolkata).
  • Over the years, SBI has expanded its operations to become one of the largest banks in the world, with a network of over 22,500 branches and ATMs across India and overseas.
  • SBI is a public sector bank, which means that the government of India owns a majority share in the bank.
  • SBI is one of the leading providers of financial services in India, including banking, insurance, and investment banking.
• Planning Commission
  • The Planning Commission was established on March 15, 1950, by the Government of India.
  • The first Prime Minister of India, Jawaharlal Nehru, was the first Chairman of the Planning Commission.
  • The Planning Commission was tasked with formulating and implementing India's Five-Year Plans.

The One-Child Policy, officially known as the Family Planning Policy, was a population control program implemented by the Chinese government from 1979 to 2016.

Key Points

• Sixth Five Year Plan (1980-1985) is the most accurate timeframe for the full implementation of the One-Child Policy in China.
• While informal discussions and preparatory measures began earlier, the official nationwide policy implementation started in September 1980, during the sixth Five Year Plan period.

Hence, one Child policy was launched in Sixth Five Year Plan.

The correct answer is 1-C, 2-B 3-A.

Key Points

• Hence, Option 3 is correct.

The correct answer is All three

Key Points

Marginal Cost of funds-based Lending Rate (MCLR):

• It is the minimum interest rate that a bank can lend at. The final rate of lending also includes risk premiums and spread charged by banks.
• MCLR is a tenor-linked internal benchmark, which means the rate is determined internally by the bank depending on the period left for the repayment of a loan.
• MCLR is closely linked to the actual deposit rates and calculated based on four components:
  • ​The marginal cost of funds;
  • Negative carry on account of cash reserve ratio;
  • Operating costs;
  • Tenor premium.
• Under the MCLR regime, banks are free to offer all categories of loans at fixed or floating interest rates. Hence, statement 2 is correct.
• Fixed-rate loans with tenors of up to three years are also priced according to MCLR. Banks review and publish MCLRs of different maturities, every month. 
• Certain loan rates, like that of fixed-rate loans with tenors above three years and special loan schemes offered by the government, are not linked to MCLR.
• Thus, MCLR aims-
  • To improve the transmission of policy rates into the lending rates of banks.
  • To bring transparency in the methodology followed by banks for determining interest rates on advances.
  • To ensure the availability of bank credit at interest rates which are fair to borrowers as well as banks. Hence, statement 3 is correct.
  • To enable banks to become more competitive and enhance their long-run value and contribution to economic growth.

Difference between MCLR and Base Rate:

• MCLR is an advanced version of the base rate.
• The base rate uses the average finance cost, but MCLR is based on the marginal or incremental cost of money. Hence, statement 1 is correct.
• When calculating the base rate, a minimum rate of return/profit margin is used, whereas, for MCLR, banks are required to include a tenor premium in the calculation.
  • Tenor is the amount of time left for repayment of the loan.
  • The higher the duration of the loan, the higher will be the risk.
  • Thus banks charge a higher rate of interest for long-term loans.