JAIIB Paper 1 Free Mock

Indicative planning guides and coordinates decisions through policy signals rather than directing every production decision.

Nominal GDP values output at current prices; if real GDP is unchanged, the difference reflects price changes.

The quaternary sector is associated with knowledge-intensive activities such as information, research and analysis.

MSP is announced for specified crops as a price-support mechanism; it does not guarantee procurement of every quantity everywhere.

The revised micro-enterprise limits are investment not exceeding ₹2.5 crore and turnover not exceeding ₹10 crore; both criteria apply.

PSL targets promote credit access for sectors such as agriculture, MSMEs and weaker sections under RBI directions.

Reliable power reduces outages and supports the operation of factories, services and digital infrastructure.

Health and education facilities are social infrastructure because they build human capabilities and welfare.

Trade can expand markets and input choices, although its gains and adjustment costs may be unevenly distributed.

A tariff is a customs duty imposed on imported goods.

FDI generally entails a lasting interest and influence in an enterprise; portfolio investment is usually more passive.

Development includes qualitative improvements in welfare and capabilities, not just an increase in measured output.

The IMF focuses on monetary cooperation, exchange stability and balance-of-payments assistance.

World Bank institutions provide development finance, knowledge and support for poverty reduction.

The WTO administers multilateral trade agreements and provides a forum for negotiations and dispute settlement.

Intergenerational equity requires considering future generations’ needs and the long-term effects of present choices.

SDG 7 is Affordable and Clean Energy.

A carbon tax internalises some of the social cost of emissions by making emitting activities more expensive.

Jobless growth describes output expansion that creates relatively few additional jobs.

Multidimensional measures capture non-income deprivations as well as, or instead of, income alone.

Rapid population growth can strain housing and public services if urban infrastructure and planning lag behind.

Liberalisation reduces selected restrictions and increases scope for market participation and competition.

Export-support measures seek to improve competitiveness but must comply with applicable domestic and international rules.

Section 135 applies to companies meeting any of the statutory net-worth, turnover or net-profit thresholds.

Formalisation involves greater registration, documentation, compliance and integration with formal systems.

A price change causes movement along the demand curve; other factors can shift the curve.

Lower production costs or higher productivity typically increase supply at each price.

Elastic demand means quantity demanded responds proportionately more than price in percentage terms.

An outward shift in demand raises both equilibrium price and quantity, other things equal.

Opportunity cost is the value of the next-best alternative sacrificed.

Inflation means the general price level rises, so a unit of money buys less on average.

Demand-pull inflation results from excessive aggregate demand relative to productive capacity.

Oil is an important input; higher prices can raise costs for transport, energy and production.

A repo-rate increase generally tightens financial conditions and can dampen demand and inflation over time.

When the RBI sells securities, buyers pay funds to the RBI, absorbing liquidity from the system.

CRR is the specified share of NDTL maintained as cash balances with the RBI.

Higher expenditure without matching revenue generally widens the fiscal deficit and can raise aggregate demand.

Fiscal responsibility frameworks aim to improve fiscal discipline and transparency and support debt sustainability.

Resale of a used good is not current production; dealer services connected with resale may count.

Real GDP removes the effect of price changes to better measure changes in production volume.

The GDP deflator is nominal GDP divided by real GDP, multiplied by 100 under the chosen convention.

Transfer payments redistribute income but do not directly represent payment for newly produced output.

Contraction is associated with declining or weakening economic activity and often weaker employment.

Keynes explained interest as the price for parting with liquidity, determined by money supply and liquidity preference.

The IS curve represents goods-market equilibrium, while the LM curve represents money-market equilibrium.

Deposit creation is not mechanical; lending is shaped by regulation, capital, liquidity, demand and risk appetite.

Depreciation means more domestic currency is needed to buy a unit of foreign currency, raising import costs.

A current-account deficit occurs when current-account debits exceed credits.

Revenue deficit equals revenue expenditure minus revenue receipts.

A financial system connects savers and users of funds through institutions, markets, instruments and infrastructure.

Scheduled banks are those included in the Second Schedule to the RBI Act, subject to relevant statutory requirements.

Small finance banks focus on financial inclusion and serving small businesses, small farmers and underserved customers.

Payments banks can accept eligible deposits and provide payment services but are not permitted to undertake lending.

RRBs were created to improve institutional credit access in rural areas.

Cooperative banks operate under a cooperative structure, with members playing a central ownership role.

NBFCs are not banks and generally cannot accept demand deposits; their permitted activities depend on their category and regulation.

The Banking Regulation Act, 1949 is a central statute governing banking companies, subject to its scope and amendments.

The RBI Act, 1934 provides the statutory basis for the Reserve Bank of India.

The RBI conducts monetary policy and manages currency issuance within its statutory responsibilities.

The committee advocated reforms including prudential norms, stronger supervision, competition and operational efficiency.

SIDBI is a principal financial institution for promotion, financing and development of the MSME sector.

NABARD supports agriculture and rural development through refinance, development and institutional support.

EXIM Bank supports India’s international trade through finance and related services.

NHB was established to promote housing finance and related institutional development.

NaBFID is a development financial institution focused on long-term infrastructure financing.

The SHG-Bank Linkage model connects savings-based groups with formal bank credit and financial services.

Joint liability provides a group-based repayment incentive and can help lenders serve borrowers with limited collateral.

Scale-based regulation calibrates requirements to the risk and systemic significance of NBFCs.

The Insurance Regulatory and Development Authority of India regulates and develops the insurance sector.

SEBI regulates the securities market and protects investors under its statutory mandate.

PFRDA regulates and develops the pension sector, including the NPS framework.

The general DICGC insurance limit is ₹5 lakh per depositor per bank, including principal and interest, subject to rules.

Business correspondents extend access to permitted banking services, particularly in underserved locations.

The primary market facilitates issuance of new securities and raises funds for issuers.

Secondary markets provide liquidity by allowing existing securities to be bought and sold.

Treasury bills are short-term government securities commonly issued at a discount and redeemed at face value.

Commercial paper is an unsecured short-term instrument subject to applicable eligibility and regulatory conditions.

CDs are negotiable money-market instruments representing deposits and are issued under the applicable framework.

Bond prices and yields move inversely for a given stream of fixed cash flows.

NAV per unit equals the net assets of the scheme divided by units outstanding, subject to applicable valuation rules.

ETF units trade on exchanges during market hours and may trade at prices that differ slightly from NAV.

Insurance relies on disclosure of material facts that affect underwriting and risk assessment.

Indemnity seeks to compensate the actual covered loss, rather than create a profit from insurance.

Term insurance provides life cover for a specified period, subject to policy terms.

Reinsurance allows an insurer to cede part of its accepted risk to another insurer or reinsurer.

Insurance repositories facilitate electronic holding and servicing of insurance policies.

In a defined-benefit arrangement, the benefit is set by a formula; investment risk is not borne solely by the member in the same way as a defined-contribution plan.

The accumulated contributions and investment returns determine the retirement corpus and benefits.

Credit ratings assess credit risk; they are opinions and are not guarantees against default.

Exchange-traded futures are standardised and cleared, while forwards are commonly bilateral and customised.

A call option gives its buyer the right to buy the underlying at the strike price under the contract terms.

USD/INR states the number of rupees for one US dollar: USD is base and INR is quote currency.

A forward purchase of dollars can lock in an exchange rate, subject to eligibility, documentation and applicable rules.

Basic savings accounts aim to broaden access to essential banking services; exact facilities are governed by current rules.

UPI supports interoperable real-time account-to-account payments through NPCI’s infrastructure.

Fair selling requires clear disclosure and recommendations aligned with customer needs and risk profile, as applicable.

Securitisation transforms pools of receivables into securities whose payments are linked to the asset pool’s cash flows.

Interoperability enables users of different participating providers to transact without being confined to one provider’s network.

Factoring involves assignment or purchase of receivables and may include financing, collection and ledger services, subject to the arrangement.

A finance lease is generally characterised by transfer of substantially all risks and rewards of ownership, assessed under applicable accounting standards and contract terms.