introduction to indian economy section 1 MCQ Questions & Answers Detailed Explanation

Answer: (d)

The most appropriate measure of a country’s economic growth is its per capita real income.

Per capita income is average income, a measure of the wealth of the population of a nation. It is used to measure a country’s standard of living thus a better indicator of economic growth.

Answer: (b)

Inflation is an increase in the prices of commodities. It is caused due to decrease in supply and an increase in demand for commodities.

So when the money supply in the economy increases it means people have more purchasing capacity and thus demand increases which result in inflation.

Answer: (d)

Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value.

High inflation means the excessive supply of money and thus leads to a rise in the cost of credit and interest rates. Higher inflation leads to a reduction in economic growth, a decrease in the cost of credit, increase in spending rather than saving as the value of money is declining.

Answer: (d)

National Bank for Agriculture and Rural Development (NABARD) was established on 12 July 1982 by a special act by the parliament and its main focus was to uplift rural India by increasing the credit flow for elevation of agriculture & rural non-farm sector.

It has been accredited with “matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India”.

Answer: (b)

Per capita income or average income or income per person is the mean income within an economic aggregate, such as a country or city.

It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population.

Answer: (d)

National Heritage City Development and Augmentation Yojana (HRIDAY) was launched on 21 January 2015 with the aim of bringing together urban planning, economic growth and heritage conservation in an inclusive manner to preserve the heritage character of each Heritage City.

The Scheme shall support the development of core heritage infrastructure projects for heritage assets such as monuments, Ghats, temples etc. along with reviving certain intangible assets.