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

Answer: (a)

The Reserve Bank of India formulates Monetary Policy in India.

Answer: (a)

Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes (i.e. inflation or deflation). Nominal gross domestic product is defined as the market value of all final goods produced in a geographical region.

Answer: (d)

Direct tax is a type of tax where the incidence and impact of taxation fall on the same entity.

In general, it is a tax imposed on income as distinct from a tax imposed upon a transaction. These are largely taxes on income or wealth. Income tax, corporation tax, property tax, inheritance tax and gift tax are examples of direct tax.

Answer: (c)

The Government of India set up Regional Rural Banks (RRBs) on October 2, 1975.

Initially, five RRBs were set up on October 2, 1975, which were sponsored by Syndicate Bank, State Bank of India, Punjab National Bank, United Commercial Bank and United Bank of India.

Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank

Answer: (c)

The national income of a country can be measured by:

1. Product Method or the Output Method
2. Income Method, and
3. Expenditure Method.

The output approach focuses on finding the total output of a nation by directly finding the total value of all goods and services a nation produces.

The expenditure approach is basically an output accounting method.

Under the Income method, national income is measured as a flow of factor incomes.

Answer: (d)

There are two components of expenditure - plan and non-plan. Of these, plan expenditures are estimated after discussions between each of the ministries concerned and the Planning Commission.

Non-plan revenue expenditure is accounted for by interest payments, subsidies (mainly on food and fertilisers), wage and salary payments to government employees, grants to States and Union Territories governments, pensions, police, economic services in various sectors, other general services such as tax collection, social services, and grants to foreign governments.