introduction to indian economy section 4 MCQ Questions & Answers Detailed Explanation

Answer: (c)

Open market operation

Answer: (c)

In a bid to make AIDS prevention a mission, the Employees’ State Insurance Corporation of India (ESIC) announced the launch of ‘Project Sankalp’ for strengthening ESIC’s intervention on HIV/AIDS and Family welfare at Mangalore, Karnataka, on 17 August 2008.

It aimed at counselling and treatment to ESIC beneficiaries affected with HIV in the State.

Answer: (b)

National income is also computed by the expenditure approach wherein the focus is on finding the total output of a nation by finding the total amount of money spent.

As per this approach,

GDP = C+I+G+ (X-M)

where, C = household consumption expenditures / personal consumption expenditures;

I = gross private domestic investment;

G = government consumption and gross investment expenditures;

X = gross exports of goods and services; and

M = gross imports of goods and services.

(X - M) is often written as XN, which stands for "net exports".

Answer: (d)

Austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies may include spending cuts, tax increases.

This is done in an economic crisis situation to improve the credit rating of the countries going through adverse economic conditions.

Answer: (a)

National income is the sum total of wages, rent, interest, and profit earned by the factors of production of a country in a year.

Thus it is the aggregate values of goods and services rendered during a given period counted without duplication.

Answer: (c)

Qualitative credit (used by the RBI for selective purposes) are:

1. Margin requirements,
2. Consumer Credit Regulation,
3. RBI Guidelines,
4. Rationing of credit,
5. Moral Suasion and
6. Direct Action.

The Quantitative Credit measures which control the total quantity of credit are:

1. Bank Rate policy,
2. Open Market Operations,
3. Cash Reserve Ratio and
4. Statutory Liquidity Ratio.