Explore topic-wise InterviewSolutions in Current Affairs.

Correct Answer is : (c) 4

Correct option: (A) profit‐oriented

A public company shall have a minimum of Three directors. 

(c) Project Report

Mr. Lamb introduces himself and tries to make a very casual conversation, cautions Derry about the fallen fruit so that he does not trip on it and tries to comfort him putting his doubts at rest.

i – b ; 

ii – a ; 

iii – a ; 

iv – d

Derry was a fourteen-year-old boy who had a scarred face. People were afraid of him and stared at him because he had an ugly burnt face. They pretended to be sympathetic but actually the attitude of the people, reflected the callousness of the society towards the physically impaired.

(b) Rights shares

1. (C) Finance Manager

2. (A) value

3. (B) market value

4. (A) economic

5. (A) Financial

6. (A) Capital structure

7.  (B) permanent 

i. (c) 

ii. (a)

i – d ; 

ii – a ;

iii – c ; 

iv – d

Mr. Lamb has an orchard full of fruit trees. He likes it because gardening keeps him busy and children also come there to play. He longs for human company as he suffers from loneliness.

1. (C) Equity shares

2. (A) huge

3. (A) well established 

4. (A) Equity shares

5. (C) borrowed

6.  (C) equity shares

7. (B) equity

8. (A) debt

(c) ‘A’ is true but ‘R’ is false

i – c ; 

ii – c ; 

iii – b ; 

iv – c

Staffing can be defined as one of the most important functions of management. It involves the process of filling the vacant position of the right personnel at the right job, at right time. Hence, everything will occur in the right manner.

In a society where there are class distinctions, there will be no Social justice.

Disadvantages of utilizing trade credit include loss of goodwill, higher prices of raw materials, the opportunity cost of discount, administration cost, and under worst circumstances one may lose the supplier as well. For suppliers, bad debts are the biggest disadvantage among others.

1. (B) 2 : 1 

2. (C) interest

3. (A) fixed

4. (C) working

5. (B) working

6. (A) an increase 

7. (A) sound 

8. (A) more

9. (A) less

The principle of considering equals as equals is also called Numerical justice.

• Efficiency is focused on the inputs and outputs. 
• Effectiveness is focused on the extent to which work is done and the end result.

(i – d), (ii – h), (iii – j), (iv – i), (v – b).

(a) Low population density

Goods have exchange value and their ownership rights can be established and exchanged.

(i – i), (ii – f), (iii – g), (iv – b), (v – j).

The numerical concept of justice and geometrical concept of justice can be codified as follows: 

Numerical concept of justice:

• Numerical concept of justice allows everyone to have equal justice. 
• It means those who were considered unequal at some point in time will be considered equals. 
• Jeremy Bentham says that each one has to account for the other. Nobody should be more than one. 
• Modern democratic nations are based on the concept of justice. 

Geometrical Concept of Justice: 

• Geometrical concept of justice supports proportionate justice. 
• Distribution of the profession should be proportionate to the competence of the individual. 
• As an example, Aristotle says flutes can be given only to those who have the capacity to play the flute. 
• In the same way, rulers must be those who are competent to rule.
• Numerical concept of justice is called Democratic Justice whereas Geometrical concept of justice is called Aristocratic Justice.

Plato has given his theoretical interpretation of justice in his famous book “The Republic”. For Plato, justice means: 

a) A lifestyle which is suitable for the features of one’s profession. 

b) Each person destined for a special task and he should be used for that task. 

c) The work one is doing. Plato feels that justice has a personal and social angle. When a person is asked to do a particular job because he is found competent in doing it, the society has to keep that job reserved for him. According to Aristotle, justice is something that can be distributed or something that can be used to rectify mistakes.

d) The Distributive Concept demands the equal distribution of things among equals. 

e) The Corrective Concept remedies the mistakes. 

f) When equals are treated unequally or when un-equals are treated equally there comes injustice.

John Rawls is an American philosopher. In his book The Theory of Justice’, he put forward 2 principles regarding the Theory of Justice. 

They are as follows: 

i) In the broad framework of basic freedom, according to the freedom of all individuals, each person should have equal opportunity. 

ii) Social and economic inequalities should be tackled in two ways:

• For the maximum benefit of those who are least favored, there should be reservations. 
• We should be guided by our discretionary powers and not morality when it comes to the distribution of government jobs so that the underprivileged get extra consideration. 

Rawls does not give us predetermined moral criteria or goals., He gives us freedom to determine what is the best in the given circumstances. This is what makes Rawls’ theory very significant and an inevitable means of approaching the problem of law and justice.

(a) Monopolistic competition

1. Financial management 

2. Profit maximization

3. Wealth maximization

4. Financial planning 

5. Capital structure

6. Equity share capital

7. Term loans

8. Trading on equity

9. Capital gearing

10. Fixed capital 

11. Working capital 

12. Net working capital

Fixed Capital and Working Capital. 

This statement is TRUE.

Reasons:

• All types of organizations, whether profit making or non‐profit making, need financial management as it plays a crucial role in making effective and optimum use of financial resources.
• These organizations require funds for their development and expansion.
• Financial management refers to management of funds and is mainly concerned with raising of finance and its effective utilization.
• It also deals with planning, organizing, directing, co‐ordinating and controlling financial activities.
• Financial management helps in maximizing profit of the company which results in maximization of the owners’ wealth.

Hence, financial management is essential for all types of organizations.

This statement is FALSE. [Financial  management  is  a  matter  of  great  concern  in  developing  countries]

Reasons:

• Financial management refers to management of funds and is mainly concerned with raising of finance and its effective utilization.
• Financial management is a subject of considerable importance in developing countries like India.
• In such countries, the existence of business entity depends upon the savings of the people which are meager in general.
• These scarce savings should be utilized to the maximum efficiency through well‐managed financial activities.
• Routine and executive functions of financial management help a finance manager to make optimum use of financial resources. 

Thus, financial management is a matter of great concern in developing countries

The following are the major problems in the industrial sector of Maharashtra:

1. Delays in government procedures create problems at the starting of industrial units.
2. Opportunities for skill development are limited.
3. Many industries in Maharashtra use traditional technologies for manufacturing goods.
4. Lack of infrastructural facilities adversely affects the movement of raw material and finished goods.
5. Due to adverse conditions, new entrepreneurs are less motivated to run industrial units.
6. The regional imbalance is found In industrial growth. Industries are located mainly in few cities of Maharashtra.

This statement is FALSE. [Maximization of profit is not the real and complete motive]

Reasons:

• Profit is a tool of measuring the success of any business firm i.e. high level profitability results in better return (dividend) to the shareholders which in turn increases their earnings per share (EPS).
• In simple terms, the business firm should undertake only such activities that increase profit and those activities which decrease profit should be avoided.
• Maximization of profit is important in regard to various factors such as: to generate funds for future expansion, better dividend to the shareholders, increase in the creditworthiness of the firm etc.
• However, it is not the only factor important for financial management. 
• The proper aim of financial management is wealth maximization of its equity shareholders.
• Moreover, business firms now‐a‐days aim at social satisfaction and social welfare.
• Therefore, profit maximization along with wealth maximization and social satisfaction are the important objectives of financial management.

Thus, ‘Maximization of profit is not the real and complete motive’.

This statement is TRUE.

Reasons:

• Financial management refers to management of funds and is mainly concerned with raising of finance and its effective utilization.
• The shareholders invest their funds in a company or an organization with a motive to increase the investment. 
• The wealth of such shareholders is reflected in market value of shares.
• If the market value of equity shares increases, wealth of shareholders also increases.
• The share price of a company, quoted in share market index, is a reflection of its earning capacity, dividend and retention policy.

Thus, the proper aim of financial management is maximizing market value of equity shares of the company.

Relation Between Economic Welfare and National Income

The effect of national income can be studied in two ways.

Change in the size of National Income

Changes in Distribution of National Income

Changes in the Size of National Income

The change in the size of national income may be given positive or negative. The positive change in the national income increases its volume. Consequently, people consume more of goods and services. Which lead to increase in the economic welfare, whilst the negative change in national income results in reduction of its volume.

Changes in Prices

If the change in national income is due to change in prices, it will be difficult to measure the real changes in economic welfare. For instance, when the national income increases as a result of increase in prices, the increase in economic welfare is not possible for the reason that it is possible that the productivity of goods and services may not have increased. It is more likely that the economic welfare would decline as a result of increase in prices. It is only the real income in national income that increases economic welfare.

Working Conditions

It depends on the manner in which the increase in national income comes about. The economic welfare cannot be said to have increased, if the increase in national income is due to explanation of labour, for instance, hike in production by labourers for longer hours by paying them lesser wages than the minimum. Influencing to put their women and kids to work by not providing them with facilities of transport to and from the factories and residence, and that their residence in slums. 

Per Capita Income

National income cannot be a reliable index of economic welfare, if per capita income is not kept in mind. It is possible that with the hike in national income, the population may increase at the same pace and thus the per capita income may not increase at all. In such a condition, the hike in national income will not result in hike in fiscal welfare and vice versa. 

Method of Spending

The influence of hike in national income on fiscal welfare depends also on the method of spending adopted by the people. If with the increase in income people spend on such necessities and facilities as milk, butter, eggs etc. which hikes efficacy, the economic welfare will increase. But otherwise, the outlay in consuming alcohol, speculating etc. will decrease the economic welfare. Hence the increase and decrease of fiscal welfare depends on changes in the tastes of people.

Political justice means an atmosphere where people have free and fair participation in the political system of the nation. Right to universal adult franchise. Non-discrimination in the appointments to government jobs.

(a) JM Keynes

Correct answer is (c) Justice means considering equals and un-equals.

The marginal productivity theory was developed by Walras.

1. Social justice: This means all the people in the society are equal. Everybody in the nation should be given equal opportunities and equal consideration. The essence of social justice is seeing everyone equally without any discrimination in the name of caste, religion, color, and gender. 

2. Economic Justice: These are the basic factors of economic justice: All the primary needs of the citizens should be fulfilled. There should circumstances where all can live comfortably. They should get adequate wages for their work. Social security must be assured. Equal pay for equal work. 

3. Political Justice: This means an atmosphere where people have free and fair participation in the political system of the nation. Right to universal adult franchise. Nondiscrimination in the appointments to government jobs.

(c) Marshall

The flow chart is filled as :-

1. Equal consideration to Equals

2. Recognizing special needs

 Principles of Justice 

a) Equal consideration to equals. 

b) Proportionate justice

c) Recognizing special rights

In case of more than one good, the consumer decides to purchase that quantity of goods when the ratio of MU and price of the desired goods are equal to each other. This can be explained with the help of the following example for good A, B, and c: Given the price of good X and y is Rs. 4 & Rs. 6,and MU_m as Re.1=I util.

In this situation a consumer will purchase 5 units of good X, 3 Units of good y to maximize her satisfaction. The reason is that the ratio of MU and price of these two goods is 1 which is also equal to Mum. If the price of these goods is assumed to be Rs.2, the consumer will purchase 6 and 5 units of good X & Y respectively.

Yes, they do. Some new economic reforms can cause denial of justice. In the open market of free competition, rural industries and small scale producers and merchants can’t survive the competition from large scale monopolies. There are also situations in which ordinary people become slaves to the consumer culture. Because of the easy loans, common people are easily caught in the debt trap!