introduction to indian economy section 4 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 14 EXERCISES
-
Top 500+ Basic Indian Economy GK MCQ Quiz For SSC IBPS »
-
New Indian Economy GK MCQ Quiz PDF For UPSC/IAS Prelims »
-
Basic Indian Economy Concepts MCQs Quiz For RRB NTPC Exam »
-
New 499+ Fundamentals of Indian Economy MCQ Quiz For IBPS »
-
555+ Indian Economy Concepts Basics Fundamentals MCQ Quiz »
-
Top 500+ Indian Economy GK MCQs Quiz PDF For SSC UPSC RRB »
-
New 499+ Indian Economy GK Question And Answers Quiz PDF »
-
Best 500+ Indian Economy General Knowledge MCQ Quiz PDF »
-
500+ Indian Economy General Studies Online MCQ Quiz PDF »
-
New 500+ Indian Economy Basic Static GK MCQ Quiz For IBPS »
-
500+ Introduction to Indian Economy GK MCQ Quiz For SSC »
-
800+ Latest Indian Economy GK Questions & Answers MCQ PDF »
-
1000+ Indian Economy GK Questions And Answers Quiz PDF »
-
1000+ Indian Economy Basic Concepts GK MCQ PDF For SBI PO »
The following question based on Introduction to Indian Economy topic of indian economy mcq
- It is an instrument of raising long-term capital.
- Bond-issuing body pays interest on it which is known as ‘contango rate’.
- It may be issued by governments and private companies both.
- ‘Bonds’ and ‘debantures’ are different in nature.
(a) Neither of the above
(b) 2 only
(c) 1 and 3 only
(d) All are true
The correct answers to the above question in:
Answer: (b)
The interest paid on bonds is known as ‘coupon’ or ‘coupon rate’. Bonds and debentures both are the instruments of raising long-term capital but while the former is supported by collateral in the former is supported by collateral in the form of immovable property, the latter are not.
Discuss Form
Read more introduction Based Indian Economy Questions and Answers
Question : 1
The process of curing inflation by reducing money supply is called
a) Down–pull inflation
b) Reflation
c) Disinflation
d) Cost-push inflation
Answer »Answer: (c)
The process of curing inflation by reducing money supply is called disinflation. Disinflation is a decrease in the rate of inflation – a slowdown in the rate of increase of the price level of goods and services in GDP. Disinflation occurs when the increase in the “consumer price level” slows down from the previous period when the prices were rising.
Question : 2
Consider the following statements :
- NTPC has diversified to the hydropower sector
- Power Grid Corporation has diversified into the telecom sector.
a) Only b
b) Only a
c) Both of a and b
d) None of a and b
Answer »Answer: (c)
NTPC Limited is the largest Indian state-owned electric utilities company based in New Delhi, India.
NTPC’s core business is engineering, construction and operation of power generating plants and providing consultancy to power utilities in India and abroad.
The name of the Company “National Thermal Power Corporation Limited” was changed to “NTPC Limited” with effect from 28 October 2005. The primary reason for this was the company’s foray into hydro and nuclear-based power generation along with backward integration by coal mining.
The Power Grid Corporation of India is an Indian state-owned electric utility company headquartered in Gurgaon, India. Power Grid wheels about 50% of the total power generated in India on its transmission network.
Power Grid has also diversified into the Telecom business and established a telecom network of more than 25,000 km across the country.
Question : 3
Which from the following is not true when the interest rate in the economy goes up ?
a) Lending decreases
b) Savings increases
c) Cost of production increases
d) Return on capital increases
Answer »Answer: (d)
Interest rates are the main determinant of investment on a macroeconomic scale. The current thought is that if interest rates increase across the board, then investment decreases, causing a fall in national income.
However, the Austrian School of Economics sees higher rates as leading to greater investment in order to earn the interest to pay the depositors.
Higher rates encourage more saving and thus more investment and thus more jobs to increase production to increase profits. Higher rates also discourage economically unproductive lending such as consumer credit and mortgage lending.
Question : 4
NABARD stands for
a) National Bank for agriculture and rural
b) National business for accounting and Reviewing
c) National Bank for aeronautics and radar development
d) National bureau for air and road transport
Answer »Answer: (a)
NABARD stands for National Bank for Agriculture and Rural Development. It is an apex development bank in India having headquarters based in Mumbai (Maharashtra).
It was established on 12 July 1982 and accredited with matters credit for agriculture and other economic activities in rural areas in India.
Question : 5
Which of the following definitions are correct?
- Basis points: increase in interest rates in percentage terms.
- Repo rate: the rate at which commercial banks borrow from the RBI by selling their securities or financial assets to the RBI for a long period of time.
- Reverse repo rate: rate of interest at which the central bank borrows funds from other banks for a short duration.
- Cash reserve ratio: minimum percentage of cash deposits that banks must keep with themselves to avoid liquidity issues.
a) (ii), (iii) & (iv)
b) (ii) & (iv)
c) (i) & (ii)
d) (iii) & (iv)
Answer »Answer: (b)
Basis points: It is the increase in interest rates in percentage terms. For instance, if the interest rate increases by 50 basis points (bps), then it means that the interest rate has been increasing by 50%. One percentage point is broken down into 100 basis points. Therefore, an increase from 2% to 3% is an increase of one percentage point or 100 basis points.
Repo rate: Repo rate is the policy rate and is part of RBI’s Liquidity Adjustment Facility (LAF). It is the rate at which commercial banks borrow from the RBI by selling their securities or financial assets to the RBI for a short period of time. It comes with an agreement that the sold securities will be repurchased by the commercial banks from the RBI at a future date at a predetermined price. The repo rate is used by the central bank to increase liquidity in the system.
Reverse repo rate: Reverse Repo Rate is also a part of LAF. It is the rate of interest at which the central bank borrows funds from other banks for a short duration. The banks deposit their short term excess funds with the central bank and earn interest on it. This rate is used by the central bank to absorb liquidity from the economy. Generally, it is one per cent less than the Repo rate. Bank rate: The only way the bank rate is different from the repo rate is that the bank rate is the rate at which banks borrow money from the central bank without any sale of securities. It is generally for a longer period of time.
Cash reserve ratio: CRR is the minimum percentage of cash deposits that banks must keep with the central bank. The current rate is 4%, which means for a cash deposit of `100, the bank has to park 4 rupees, with the central bank.
Question : 6
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 »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
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
introduction to indian economy section 1
introduction to indian economy section 2
introduction to indian economy section 3
introduction to indian economy section 4
introduction to indian economy section 5
introduction to indian economy section 6
introduction to indian economy section 7
introduction to indian economy section 8
introduction to indian economy section 9
introduction to indian economy section 10
introduction to indian economy section 11
introduction to indian economy section 12
introduction to indian economy section 13
introduction to indian economy section 14
Introduction to Indian Economy Shortcuts and Techniques with Examples
Verbal Reasoning
Question & Answer Quiz
Non Verbal Reasoning
Question & Answer Quiz
Quantitative Aptitude
Question & Answer Quiz
Computer MCQ
Question & Answer Quiz
General English
Question & Answer Quiz
History GK
Question & Answer Quiz
Polity GK
Question & Answer Quiz
Geography GK
Question & Answer Quiz
Economy GK
Question & Answer Quiz
General Awareness GK
Question & Answer Quiz
Recently Added Subject & Categories For All Competitive Exams
Most Important Antonyms Vocabulary - IBPS Clerk Prelims 2024
Latest Antonyms multiple choice questions and answers with free PDFfor IBPS Clerk Prelims 2024. English Vocabulary practice exercise for all bank exam
Continue Reading »
Syllogism Practice Questions Answers PDF - IBPS Clerk 2024
Practice Verbal Reasoning Syllogism multiple choice questions and answers with Fully solved explanation, PDF for the IBPS Clerk Prelims 2024 Bank Exam
Continue Reading »
IBPS Clerk Prelims 2024 Synonyms Questions Solved Answers
Most important IBPS Clerk Prelims 2024 Synonyms and Antonyms multiple choice questions and answers with detailed solutions, English vocabulary PDF Download
Continue Reading »
New Cloze Test Questions and Answers PDF - IBPS Clerk 2024
The most important Cloze Test questions with detailed answers for upcoming IBPS Clerk prelims 2024. Latest English verbal ability practice MCQs, PDF
Continue Reading »