Insurance concepts and basic macroeconomic indicators - One Line Questions
1.
The unemployment rate is calculated as: —
(Number of unemployed / Total labor force) * 100
2.
An increase in government spending, while keeping taxes the same, would typically lead to: —
An increase in aggregate demand
3.
Inflation is defined as: —
A sustained increase in the general price level of goods and services
4.
What is 'disinflation'? —
A decrease in the rate of inflation
5.
Which of the following best describes the fundamental principle of insurance? —
Transfer of risk from an individual to an insurer
6.
What is 'reinsurance' in the context of insurance? —
Insurance purchased by one insurance company from another to transfer risk
7.
What does the 'liquidity trap' refer to in monetary economics? —
A situation where monetary policy becomes ineffective because interest rates are close to zero
8.
A 'recession' in economics is typically characterized by: —
A significant decline in economic activity spread across the economy, lasting more than a few months
9.
In insurance, 'subrogation' refers to the insurer's right to: —
Recover losses from a third party responsible for the damage
10.
A contract of insurance is typically based on the principle of: —
Uberrimae Fidei (Utmost Good Faith)
11.
Which macroeconomic indicator measures the total value of all final goods and services produced within a country in a specific period? —
Gross Domestic Product (GDP)
12.
What does a negative GDP growth rate signify? —
Economic contraction or recession
13.
What does a rising GDP generally indicate about an economy? —
Economic growth
14.
Which type of unemployment occurs when workers' skills do not match the available jobs? —
Structural Unemployment
15.
Which indicator measures the average income earned per person in a country? —
GDP per capita
16.
What is 'monetary policy' primarily concerned with? —
Management of the money supply and interest rates
17.
A 'budget deficit' occurs when: —
Government expenditure exceeds government revenue
18.
Which of the following is a measure of the cost of living and is used to track inflation? —
Consumer Price Index (CPI)
19.
Which macroeconomic indicator reflects the overall value of a country's exports minus its imports? —
Balance of Trade (BoT)
20.
What does a 'trade surplus' signify? —
Exports are greater than imports
21.
The 'repo rate' is a tool used by the RBI to: —
Decrease the money supply
22.
Which of the following is a potential consequence of high inflation for an economy? —
Erosion of savings and fixed incomes
23.
Which of the following is a macroeconomic indicator that reflects the overall health and direction of an economy? —
All of the above
24.
The 'reverse repo rate' is the rate at which the RBI: —
Borrows money from commercial banks
25.
Which type of insurance covers losses arising from damage to property due to fire, theft, or natural disasters? —
General Insurance
26.
Which type of insurance covers medical expenses incurred by an individual? —
Health Insurance
27.
Which of the following is a key component of Gross National Product (GNP)? —
Net income from abroad plus GDP
28.
Which term refers to the potential for loss or damage that can be insured against? —
Risk
29.
Which principle of insurance states that the insured must have an insurable interest in the subject matter of insurance at the time of loss? —
Principle of Insurable Interest
30.
Which of the following is a common cause of demand-pull inflation? —
Increased government spending and consumer demand
31.
Which institution is responsible for formulating and implementing monetary policy in India? —
Reserve Bank of India (RBI)
32.
Which of the following is NOT a type of life insurance policy? —
General Annuity
33.
Which type of insurance policy provides a death benefit and also accumulates cash value? —
Whole Life Insurance
34.
What does the 'coefficient of variation' measure in statistical analysis, often relevant to risk assessment in finance and insurance? —
The degree of variability relative to the mean
35.
What does the term 'fiscal policy' refer to? —
The government's use of spending and taxation to influence the economy
36.
A 'policyholder' is: —
The individual or entity who owns the insurance policy
37.
In insurance terminology, what does 'indemnity' mean? —
The insurer aims to restore the insured to the financial position they were in before the loss
38.
The Consumer Price Index (CPI) is primarily used to measure: —
The average change over time in the prices paid by urban consumers for a market basket of consumer goods and services
39.
What is the 'insurable event' in an insurance contract? —
The specific event that triggers the insurer's liability to pay a claim
40.
What is 'underwriting' in the insurance context? —
The process of assessing and evaluating the risk of insuring a person or asset
41.
The 'moral hazard' in insurance refers to: —
The risk that the insured will act more recklessly because they are insured
42.
What is the 'sum assured' in a life insurance policy? —
The maximum amount the insurer will pay in case of a claim
43.
A 'deductible' in an insurance policy is: —
The amount the insured must pay out-of-pocket before the insurer starts paying
44.
What does the 'term' in term life insurance represent? —
The period for which the life cover is provided
45.
What is the primary purpose of a premium in insurance? —
To cover all of the above
46.
What is the primary goal of insurance in a society? —
To provide financial security against unforeseen losses
47.
What is the primary purpose of a 'claim' in insurance? —
To request payment from the insurer for a covered loss
48.
What is the primary role of the 'Actuary' in the insurance industry? —
To assess and manage financial risks and probabilities
49.
What is the main function of the IRDAI (Insurance Regulatory and Development Authority of India)? —
To regulate and promote the insurance industry in India