BANKING RELATED ECONOMICS QUESTIONS

1. Q.  What is a Balance Sheet of a company?

Ans.   Balance sheet : It is a statement of accounts, generally of a business concern,prepared at the end of a year,showing debits and credits under broad heads, to find out the profit and loss position.

2. Q.  What is a Banker’s Cheque?

Ans. Banker's Cheque : A cheque by one bank on another.

3. Q.  What is meant by Bank Rate?

Ans.   Bank Rate : It is the rate of interest charged by the Reserve Bank of India for lending money to commercial banks.

4. Q.  What is ‘Black Money’?

Ans.   Black Money : It means unaccounted money.

5. Q.  Define Bear in stock exchanges:

Ans.   Bear : A speculator in the stock market who believes that prices will go down.

6. Q.  What is a ‘bearer’ in the context of cheques?

Ans.   Bearer : This term on cheques and bills denotes that any person holding the same has the same right in respect of it, as the person who issued it.

7. Q.  What is a Bonus in the context of shares of companies?

Ans.   Bonus : It is in addition to normal payment of dividend to shareholders by a company, or an extra gratuity paid to workers by the employer.

8. Q.  What is a Budget?

Ans. Budget : An estimate of expected revenues and expenditure for a given period,usually a year, item by item.

9. Q. What is meant by Budget deficit?

Ans.   Budget deficit : When the expenditure of the government exceeds the revenue, the balance between the two is the budget deficit.

10. Q. What do you understand by the term ‘Bulls’ in the context of stock market?

Ans. Bulls : Speculators in the stock markets who buy goods, in some cases without money to pay with, anticipating that prices will go up.

11. Q.          What is a Buyer’s Market situation?

Ans.   Buyer's Market : An area in which the supply of certain goods exceeds the demands so that purchases can drive hard bargains.

12.Q. What is a carat?

Ans. Carat : Measure or weight for precious stones. 24 carat gold is the purest gold, thus 22 carat gold means a piece of gold in which 22 parts of pure gold and 2 parts of an alloy, usually copper.

13. Q. What is a cartel in the context of business?

Ans.   Cartel : It is a combination of business, generally in the same trade formed with a view to controlling price and enjoying monopoly.

14. Q. What is call money?

Ans.   Call money : Loan made for a very short period in the finance market mostly among banks. It carries rate of interest depending on the demand/supply position from time to time.

15. Q. What is a commercial bank?

Ans. Commercial Banks : Financial institutions that create credit accept deposits, give loans and perform other financial functions. They create credit by creation deposits on the basis of their cash reserve ratio.

16. Q. What is meant by deflation?

Ans. Deflation : It is a state in monetary market when money in circulation has decreased and is characterised by low prices, unemployment,etc.

17. Q. What is depreciation?

Ans.   Depreciation : Reduction in the value of a fixed assets due to wear and tear.

18. Q. What is devaluation of currency?

Ans. Devaluation : Official reduction in the foreign value of domestic currency. It is done to encourage the country's exports and discourage imports.

19. Q. What is dumping?

Ans.   Dumping : Sale of a commodity at different prices in different markets, lower price being charged in a market where demand is relatively elastic.

20. Q.  What do you understand by the term ‘Exchange rate’?

Ans. Exchange Rate : The rate at which central banks will exchange one country's currency for another.