introduction to indian economy section 5 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Financial inclusion is the delivery of financial services, at affordable costs, to sections of disadvantaged and low income segments of society. It includes opening educational centres, opening wealth management centres by Citibank etc. Khan commission had put forward its report on financial inclusion.

Answer: (a)

Factors responsible for this are given below:

1. The boost to demand given by monetary and fiscal stimulus following the crisis was large. Final consumption grew at an average of over 8% annually between 2009-10 and 2011-12. The result was strong inflation and a powerful monetary response that also slowed consumption demand.
2. Beginning in 2011-12 corporate and infrastructure investments started slowing both as a result of investment bottlenecks as well as the tighter monetary policy.

Answer: (a)

The independent review committee headed by Dr P. Rama Rao was set up to review the functioning of the Defence Research and Development Organisation (DRDO).

The following recommendations of the committee were accepted by the government:

1. Nomination of nodal officers for structured interaction between DRDO and Services;
2. Integrated Financial Advice Scheme for financial decentralization; etc.

Answer: (b)

Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.

An increase in CRR means that banks have fewer funds available and money is sucked out of circulation; on the contrary, reduction in CRR leads to credit creation. CRR is used by RBI to control liquidity in the banking system.

Answer: (d)

Megacities of India have more than 5 million population. But not all the major megacities are located on the sea coast or are sea ports. Delhi, which is the national capital is not a sea port.

Answer: (c)

GDP deflator is an economic metric that accounts for inflation by converting output measured at current prices into constant-collar GDP. The GDP deflator shows how much a change in the base year’s GDP relies upon changes in the price level.