B. Fund environmentally sustainable development projects
C. Reduce fiscal deficit of governments
D. Promote foreign direct investment
Answer: B [Fund environmentally sustainable development projects] Explanation:
Green Bonds are issued specifically to finance projects that deliver environmental benefits, such as reducing carbon emissions, conserving energy, or protecting natural resources.
Funds raised often go into renewable energy, clean transportation, sustainable agriculture, water management, and green building initiatives.
They attract investors who want both financial returns and positive environmental impact, aligning with the growing trend of socially responsible investing.
By channeling capital into eco‑friendly projects, Green Bonds support international climate goals like the Paris Agreement and help countries transition toward sustainable economies.
Q2.
The term “Gig Economy” refers to:
A. An economy dominated by large manufacturing industries
B. A system of permanent government employment
C. A labour market based on short-term contracts and freelance work
D. An economy driven mainly by agricultural activities
Answer: C [A labour market based on short-term contracts and freelance work] Explanation:
The Gig Economy is characterized by temporary, flexible jobs where individuals are hired for specific tasks or projects rather than permanent employment.
Examples : Common roles include freelance writing, ride‑sharing drivers, food delivery, graphic design, and consulting services.
Advantages & Challenges : Workers enjoy flexibility and autonomy, but face issues like income instability, lack of benefits, and limited job security.
Q3.
Sovereign ratings primarily indicate a country’s:
A. Ability and willingness to repay its debt
B. Level of economic inequality
C. Volume of foreign trade
D. Size of foreign exchange reserves
Answer: A [Ability and willingness to repay its debt ] Explanation:
Sovereign ratings are assessments made by credit rating agencies (like Moody’s, S&P, Fitch) that evaluate a country’s creditworthiness.
They primarily indicate a nation’s ability and willingness to meet its debt obligations on time, including repayment of principal and interest.
A higher rating lowers borrowing costs for governments, while a lower rating increases interest rates and reduces investor confidence.
Q4.
Balance of Payments refers to:
A. Difference between exports and imports of goods only
B. Net inflow of foreign investment
C. Annual budgetary position of government
D. Record of all economic transactions between a country and rest of world
Answer: D [Record of all economic transactions between a country and rest of world ] Explanation:
Balance of Payment is a comprehensive record of all monetary transactions between residents of a country and the rest of the world during a specific period, usually a year.
It includes the current account (trade in goods and services, income, transfers), the capital account (capital transfers, asset transactions), and the financial account (investments, loans, reserves).
It helps governments and economists understand a country’s economic position, external stability, and international financial relationships.
Q5.
Central Bank Digital Currency (CBDC) refers to:
A. Private cryptocurrencies issued by companies
B. Digital form of fiat currency issued by central bank
C. Virtual tokens used only for online shopping
D. Blockchain-based assets without legal tender status
Answer: B [Digital form of fiat currency issued by central bank] Explanation:
CBDC is the official digital version of a country’s fiat currency, issued and regulated by its central bank (e.g., RBI in India, Federal Reserve in the US).
Legal Tender Status: Unlike private cryptocurrencies, CBDCs have full legal tender status, meaning they can be used for all transactions just like physical cash.
They may use blockchain or other secure digital technologies, but the key difference is that they are backed by the government and central bank authority.
CBDCs aim to improve payment efficiency, reduce transaction costs, enhance financial inclusion, and provide a secure alternative to private digital currencies.