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

Answer: (a)

Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.

Answer: (c)

As per the Economic Survey 2011-12, Petroleum, oil and lubricants (POL) imports constituted 31.4 per cent of total imports in the first half of 2011-12 due to high prices of crude oil.

1. Food and allied products comprised 3.1 per cent share;
2. Fertilizers: 1.7 per cent;
3. Capital Goods: 11.6 per cent;
4. Chemicals: 5.1 per cent;
5. Pearls, Precious Stones: 6.0 per cent;
6. Gold & Silver: 13.3 per cent; and
7. Electronic goods comprised a 7.2 per cent share of the total imports.

Answer: (c)

The Reserve Bank of India has the responsibility of maintaining fixed exchange rates with all other member countries of the International Monetary Fund.

Besides maintaining the rate of exchange of the rupee, the Reserve Bank has to act as the custodian of India’s reserve of international currencies. It operates the exchange control system.

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: (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: (a)

The Reserve Bank of India formulates Monetary Policy in India.