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

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The following question based on Introduction to Indian Economy topic of indian economy mcq

Questions : While computing national income estimates, which of the following is required to be observed ?

(a) The value of exports to be subtracted and the value of imports to be added

(b) The value of exports to be added and the value of imports to be subtracted

(c) The value of both exports and imports to be added

(d) The value of both exports and imports to be subtracted

The correct answers to the above question in:

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".

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Question : 1

Maruti cars are mainly based on

a) Korean Technology

b) Japanese Technology

c) Russian Technology

d) German Technology

Answer: (b)

Maruti Udyog Ltd. came into being in the year 1982 when Suzuki Motor Corporation (SMC) entered into a joint venture with the Government of India to manufacture fuel-efficient passenger cars under the brand name Maruti.

Maruti cars, based on the Japanese philosophy for super-efficient manufacturing, brought about the renaissance of the Indian components industry.

Question : 2

Which of the following is/are the steps which will result in containing inflation?

  1. Increasing Cash Reserve Ratio (CRR)
  2. Decreasing Statutory Liquidity Ratio (SLR)
  3. Permitting central/state agencies to import duty free pulses and sugar.
Select the correct answer using the codes given below:

a) 2 and 3

b) 1 and 3

c) 1 only

d) 1, 2 and 3

Answer: (b)

In order to curb inflation, if CRR is increased, then it may take liquidity from markets as banks will have to deposit more money with RBI. Moreover, inflation may also be curbed by permitting central/state agencies to import duty-free pulses and sugar.

However, decreasing SLR will leave more money to banks to give loans, which in turn will lead to inflation.

Question : 3

NREGP is the abbreviated form of

a) National Rural Educational Guarantee Programme

b) National Rural Employment Guarantee Programme

c) National Rapid Educational Guarantee Programme

d) National Rapid Employment Guarantee Programme

Answer: (b)

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on August 25, 2005.

The scheme provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage of Rs.120.

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October 2009

Question : 4

Project ‘Sankalp’ started for the purpose ________

a) To eradicate Polio

b) To eradicate illiteracy

c) To eliminate AIDS/HIV

d) To eliminate unemployment

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.

Question : 5

The purchase and sale of securities by the Central Bank is known as

a) Bank rate

b) Variable reserve ratio

c) Open market operation

d) Net liquidity ratio

Answer: (c)

Open market operation

Question : 6

Which one of the following is not an industrial finance institution?

a) ICICI

b) UTI

c) NABARD

d) SFCs

Answer: (c)

NABARD provides its refinance for the promotion of agriculture in India.

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