Best Economy Concepts and Terminology Q&A Part – 1

In this Session, I will take you through Best Economy Concepts and Terminology Q&A. These Questions given in Best Economy Concepts and Terminology Q&A Part-1 are the most important questions for all competitive exams. I have tried to cover all important questions related to Economy Concepts and Terminology . Now Let’s go through below Best Economy Concepts and Terminology Q&A Part-1.

Economy Terms and Terminology

Economy Terminology

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1. What is Activity Rate ?

Ans. The Labour Force of a Country is Known as the Activity Rate or Participation rate.

2. What is Alpine Convertible Bond(ACB) ?

Ans. An ACB is a foreign currency convertible bond(FCCB) issued by an Indian Company exclusively to the Swiss Investors.

3. What is ADS Conversion Offer ?

Ans. The Conversion of local shares into American Depository Shares(ADS) of a Company is called an ADS Conversion Offer.

4. What is ADRs ?

Ans. It is known as American Depository Receipt which enables investors based in the USA to invest in stocks of non-US Companies trading on a Non-US Stock Exchange.

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5. What is Balloon Payment ?

Ans. When the final payment of a debt is more than the previous payments, it is called Balloon Payment.

6. What is VGF ?

Ans. The Viability Gap Funding(VGF) is a fund assistance facility provided by the GOI to the private players in the infrastructure projects being developed under public private partnership.

7. What is Leveraged Bid ?

Ans. A takeover bid being financed primarily by the loan.

8. What is Zero-Sum Game ?

Ans. A situation in the Game theory when the gains made by winners in an economic transaction is equal to the losses suffered by the loosers.

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9. What is Zero Coupon Bond ?

Ans. A bond bearing zero coupon rate(i.e no interest) sold at a price lower than its face value.

10. What is wildcat strike ?

Ans. A strike called on by a group of employees without the support of their organized trade union.

11. What is Withholding Tax  ?

Ans. A tax imposed on the income on a foreign portfolio(investments).

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12. What is Tight Money ?

Ans. When money has becomes difficult to mobilise, then it is called tight money.

13. What is Till Money ?

Ans. The Notes and Coins the commercial banks keep to meet everyday cash requirements of their customers is called Till Money.

14. What is Soft Currency ?

Ans. A term used in the foreign exchange market which denotes the currency that is easily available in any economy in its forex market.

15. What is Hot Currency ?

Ans. It is a term of the forex market and is a temporary name for any hard currency.

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16. What is Hard Currency ?

Ans. It is the international currency in which the highest faith is shown and is needed by every economy. For Ex – US Dollar, the Euro, Japanese Yen etc.

17. What is Heated Currency ?

Ans. A term used in the forex market to denote the domestic currency which is under enough pressure (heat) of depreciation due to a hard currency’s high tendency of exiting the economy.

18. What is Cheap Currency ?

Ans. If a government starts re-purchasing its bonds before their maturities, the money which flows into the economy is known as the cheap currency.

19. What is NEER(Nominal Effective Exchange Rate) ?

Ans. It is weighted average of exchange rates before the currencies of India’s major trading partners.

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20. What is REER ?

Ans. When the weight of inflation is adjusted with the NEER, we get the Real Effective Exchange rate of the rupee.

21. What is EFF ?

Ans. It is a service provided by the IMF to its member countries which authorises them to raise any amount of foreign exchange from it to fulfill their BoP crisis.

22. What is Scrip Share ?

Ans. A share given to the existing shareholders without any charge.

23. What is Sweat Share ?

Ans. A share given to the employees of the company without any charge.

24. What is Participatory Notes(PNs) ?

Ans. In Indian context, It is derivative instrument issued in foreign jurisdictions, by a SEBI registered FII, against Indian securities instrument may be equity, debt, derivatives or may even be an index.

 

 

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