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
(a) Auctioning of foreign exchange
(b) Buying and selling of stocks
(c) Trading in securities
(d) Transactions in gold
The correct answers to the above question in:
Answer: (c)
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis.
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Question : 1
The bank cheques are processed by using
a) PMR
b) MICR
c) OMR
d) OCR
Answer »Answer: (b)
Magnetic Ink Character Recognition, or MICR, is a character-recognition technology used primarily by the banking industry to facilitate the processing of cheques and makes up the routing number and account number at the bottom of a cheque.
The technology allows computers to read the information (such as account numbers) off printed documents. Unlike barcodes or similar technologies, however, MICR codes can be easily read by humans.
MICR characters are printed in special typefaces with magnetic ink or toner, usually containing iron oxide.
Question : 2
Which one of the following is not a method of measurement of National Income?
a) Expenditure Method
b) Value Added Method
c) Income Method
d) Investment Method
Answer »Answer: (d)
The investment method is not a method of measurement of National Income.
There are three methods of measurement; income method, product or value-added method and the expenditure method. In the initial phase, the production of goods and services takes place.
During the course of production, payment is made to all factors of production like wages to labour etc. Once the production completes the output is distributed for different uses like consumption etc.
Question : 3
What do you understand by ‘regressive taxation’?
a) Taxation where the tax rate increases irrespective of fall or rise in taxable incomes.
b) Taxation where the tax rate increase with the increase of taxable income
c) Tax that takes a larger perentage from lowincome people than from high income people.
d) None of above
Answer »Answer: (c)
A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder.
The regressive tax imposes a greater burden (relative to resources) on the poor than on the rich — there is an inverse relationship between the tax rate and the taxpayer’s ability to pay as measured by assets, consumption, or income.
Question : 4
Fixed Foreign Exchange Rate can be changed by
a) SEBI
b) RBI
c) Ministry of Finance
d) FIPB
Answer »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.
Question : 5
The biggest item of India’s imports is :
a) Mica
b) Iron ore
c) Petroleum products
d) Gems and jewellery
Answer »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.
- Food and allied products comprised 3.1 per cent share;
- Fertilizers: 1.7 per cent;
- Capital Goods: 11.6 per cent;
- Chemicals: 5.1 per cent;
- Pearls, Precious Stones: 6.0 per cent;
- Gold & Silver: 13.3 per cent; and
- Electronic goods comprised a 7.2 per cent share of the total imports.
Question : 6
‘Mixed economy’ refers to
a) the co-existence of public as well as private sector
b) the promotion of agriculture as well as cottage industries
c) the co-existence of rich as well as poor
d) the co-existence of heavy, small scale and cottage industries
Answer »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.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
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introduction to indian economy section 14
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