If the inflation in an economy is rising steadily, the Central Bank might _____

The correct answer is D, Pigou. A.C. Pigou belongs to the welfare group of definitions, not the wealth group. In his book The Economics of Welfare he treated economics as the study of that part of social welfare which can be brought into relation with money, carrying forward the line taken by Alfred Marshall, who called economics a study of people in the ordinary business of life. The wealth definitions came earlier. A is wrong because Adam Smith, in An Inquiry into the Nature and Causes of the Wealth of Nations, called economics the science of wealth and is the father of the wealth definition. B is wrong because J.B. Say described economics as the science which deals with wealth. C is wrong because Francis Walker held that economics is that body of knowledge which relates to wealth. Later Lionel Robbins gave the scarcity definition, treating economics as the study of human behaviour as a relationship between ends and scarce means. Exam tip: wealth – Smith, Say, Walker; welfare – Marshall, Pigou; scarcity – Robbins.

The correct answer is C, neonatal mortality rate. The neonatal period is the first 28 completed days after birth, and the neonatal mortality rate counts the deaths in that period for every 1,000 live births in a year. It is watched closely because most of these deaths come from a few causes that good care can prevent, such as birth asphyxia, low birth weight, early infection and preterm birth. Within it, deaths in the first seven days are counted separately as early neonatal deaths. A is wrong because the infant mortality rate covers deaths of children below one year of age per 1,000 live births, a wider group. B is wrong because the crude death rate counts all deaths in a year per 1,000 of the whole population, without regard to age. D is wrong because an age-specific mortality rate counts deaths in one chosen age group per 1,000 people of that group. Exam tip: neonatal – within 28 days; infant – within one year; under-five – within five years, all per 1,000 live births.

The correct answer is A, World Bank. The International Bank for Reconstruction and Development (IBRD) is the oldest arm of the World Bank Group and the body people mean when they say 'World Bank'. It was agreed at the Bretton Woods Conference of 1944 along with the IMF and began work in 1946, first to rebuild Europe after the Second World War and later to lend for development. Its headquarters are in Washington, D.C., and IBRD lends to middle-income and creditworthy low-income governments. The World Bank Group also holds the IDA, which gives the poorest countries interest-free credits, plus IFC, MIGA and ICSID. Option B is wrong because the IMF is the other Bretton Woods twin and looks after exchange stability and balance-of-payments support, not project lending. Option C is wrong because the WTO replaced GATT in 1995 and frames trade rules, with its seat at Geneva. Option D is wrong because option A is correct. Exam tip: World Bank = IBRD + IDA; the wider World Bank Group adds IFC, MIGA and ICSID.

The correct answer is D, Both I and II. Statement I is right, because a government security, or G-Sec, is a tradeable debt instrument issued by the central government or by a state government and can be bought and sold in the secondary market before it matures. Statement II is right as well, because repayment is promised by the government itself, so these papers carry practically no risk of default and are therefore called risk-free gilt-edged instruments. Short-dated central paper is issued as treasury bills of 91, 182 and 364 days, which are sold at a discount and repaid at face value, while longer paper is issued as dated securities that pay a fixed coupon every six months; a state's issue is called a State Development Loan. The Reserve Bank of India manages these borrowings for the government and conducts the auctions. A is wrong because it rejects both correct statements. B is wrong because it leaves out the gilt-edged character. C is wrong because it denies that G-Secs can be traded. Exam tip: G-Secs are tradeable and gilt-edged; treasury bills run 91, 182 and 364 days.

The correct answer is A, JLGs. NABARD started a pilot project on Joint Liability Groups in 2004-05 so that small, marginal and tenant farmers, who often till land they do not own, could borrow without the land papers a bank usually demands. A JLG is an informal group of roughly four to ten farmers of the same village who take a bank loan together and stand guarantee for one another, so the trust within the group takes the place of collateral. The pilot ran through selected banks in a few states, worked well, and was then adopted as a regular channel of farm credit alongside the older self-help group route. B is wrong because MEDP is NABARD's Micro Enterprise Development Programme, a skill training effort for members of mature SHGs. C is wrong because SGSY was a self-employment scheme of the rural development ministry. D is wrong because the SHG Bank Linkage Programme began in 1992 and mainly serves women's savings groups. Exam tip: JLG pilot 2004-05, tenant and oral lessee farmers, joint guarantee and no collateral.