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

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.

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.

Answer: (c)

The Reserve Bank has introduced banknotes in the Mahatma Gandhi Series since 1996 and has so far issued notes in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000 in this series.

Mahatma Gandhi series of Rs.50 notes has a picture of the Parliament of India on its reverse.

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.

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: (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.