Open Market Operations (OMO) is the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite. OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.

Correct Option: C

Open Market Operations (OMO) is the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system. Purchases inject money into the banking system and stimulate growth while sales of securities do the opposite. OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.

Interest rates are the main determinant of investment on a macroeconomic scale. The current thought is that if interest rates increase across the board, then investment decreases, causing a fall in national income. However, the Austrian School of Economics sees higher rates as leading to greater investment in order to earn the interest to pay the depositors. Higher rates encourage more saving and thus more investment and thus more jobs to increase production to increase profits. Higher rates also discourage economically unproductive lending such as consumer credit and mortgage lending.

Correct Option: D

Interest rates are the main determinant of investment on a macroeconomic scale. The current thought is that if interest rates increase across the board, then investment decreases, causing a fall in national income. However, the Austrian School of Economics sees higher rates as leading to greater investment in order to earn the interest to pay the depositors. Higher rates encourage more saving and thus more investment and thus more jobs to increase production to increase profits. Higher rates also discourage economically unproductive lending such as consumer credit and mortgage lending.

At present 74% to 100% FDI is permitted for various telecom services. 100% FDI is permitted in the area of telecom equipment manufacturing and provision of IT enabled services. This has made telecom one of major sectors attracting FDI inflows in India. For Basic and cellular, Unified Access Services, National / International Long Distance, VSat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added telecom services FDI upto 74% (including FDI, FII, NRI, FCCBs, ADRs, GDRs, convertible preference shares, and proportionate foreign equity in Indian promoters/ Investing Company) is permitted. FDI upto 49% is permitted under automatic route and beyond 49% by relevant FIPB guidelines. For ISP (with gateways), end to end bandwidth and Radio Paging Service FDI upto 74% is permitted subject to licensing and security requirements. Here also, FDI up to 49% is permitted under automatic route and beyond 49% by FIPB guidelines. For ISP without gateway, Infrastructure Providers providing dark fibre, right of way, duct space, Tower (Category-I), Electronic Mail and Voice Mail - FDI up to 100% is allowed subject to the conditions that such companies would divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. Again, FDI up to 49% is permitted under automatic route and beyond 49% by FIPB guidelines.

Correct Option: D

At present 74% to 100% FDI is permitted for various telecom services. 100% FDI is permitted in the area of telecom equipment manufacturing and provision of IT enabled services. This has made telecom one of major sectors attracting FDI inflows in India. For Basic and cellular, Unified Access Services, National / International Long Distance, VSat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added telecom services FDI upto 74% (including FDI, FII, NRI, FCCBs, ADRs, GDRs, convertible preference shares, and proportionate foreign equity in Indian promoters/ Investing Company) is permitted. FDI upto 49% is permitted under automatic route and beyond 49% by relevant FIPB guidelines. For ISP (with gateways), end to end bandwidth and Radio Paging Service FDI upto 74% is permitted subject to licensing and security requirements. Here also, FDI up to 49% is permitted under automatic route and beyond 49% by FIPB guidelines. For ISP without gateway, Infrastructure Providers providing dark fibre, right of way, duct space, Tower (Category-I), Electronic Mail and Voice Mail - FDI up to 100% is allowed subject to the conditions that such companies would divest 26% of their equity in favour of Indian public in 5 years, if these companies are listed in other parts of the world. Again, FDI up to 49% is permitted under automatic route and beyond 49% by FIPB guidelines.

Gross National Product (GNP) is the market value of all products and services produced in one year by labor and property supplied by the residents of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production, GNP allocates production based on ownership. Therefore if the firm sells new shares directly to individuals it has no effect on the Gross National product as there is no direct relation between two.

Correct Option: D

Gross National Product (GNP) is the market value of all products and services produced in one year by labor and property supplied by the residents of a country. Unlike Gross Domestic Product (GDP), which defines production based on the geographical location of production, GNP allocates production based on ownership. Therefore if the firm sells new shares directly to individuals it has no effect on the Gross National product as there is no direct relation between two.

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.

Correct Option: D

In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.