1. Consider the following statements and select the correct code :

. Most of the governments run unbalanced budgets.

. In a balance budget there could be budget surplus but no budget deficit.21

CODE:

(a) Only 1

(b) Only 2

(c) Both 1 and 2

2. 'Increasing incomes due to inflation pushes individuals into higher tax slabs and leaves

them worse off'. This phenomenon is known as :

3. What is correct about 'budget line'?

4. Select the correct statement/statements regarding 'carry trade' using the code given below:

. Promoting foreign trade on the basis of bilateral terms

. Borrowing in one currency and investing in another

. A situation of zero trade balance

CODE :

(a) 1 and 2

(b) 2 and 3

(c) 1, 2 and 3

(d) None of these

5. 'A wide acceptance of the idea of 'caveat emptor' among the industrialists is believed to

have propelled the development and growth of the industrialised economies'. What does the

phrase in inverted commas mean?

6. Provide the most correct statement regarding 'debt swap' :

7 Talk about derivatives :

8. 'Disgorgement' has been recently in news in India which stands for:

9. Experts believe that the falling of share indices around the world in early 2008 was a

'Domino effect' of the subprime crisis originating in the US economy. Provide the correct

Meaning of the phrase in the inverted commas:

10. 'People generally spend a smaller part of their budget on food as their income rises'. Provide a correct answer on which thissituation is referring to?