introduction to indian economy section 5 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Indian Economy topic of indian economy mcq
(a) Fiscal Responsibility and Budget Management Act
(b) Banking Regulation Act
(c) Foreign Exchange Management Act
(d) Financial Action Task Force Act
The correct answers to the above question in:
Answer: (c)
The Foreign Exchange Management Act, 1999 (FEMA) is an Act of the Parliament of India “to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India”.
It was passed in the winter session of Parliament in 1999, replacing the Foreign Exchange Regulation Act (FERA).
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Read more introduction Based Indian Economy Questions and Answers
Question : 1
In India the largest public undertaking is —
a) Indian Railways
b) Air India
c) IOC
d) LIC
Answer »Answer: (c)
Indian Oil Corporation Limited is the largest commercial undertaking and India’s No.1 Company in Fortune the magazine’s prestigious listing of the world’s 500 largest Corporations, ranked 98 for the year 2011 based on fiscal 2010 performance.
Question : 2
Devaluation of currency leads to
a) contraction of import trade
b) all of the above
c) expansion of import substituting
d) expansion of export trade
Answer »Answer: (b)
Devaluation of currency leads to all of the above-given aspects.
Devaluation leads to a country’s exports become less expensive as the currency is deliberately adjusted down to other currencies, making imports more expensive, making domestic consumers less likely to purchase them thus the domestic companies are encouraged to substitute imports.
Question : 3
The term stagflation refers to a situation where
a) rate of growth and prices both are decreasing
b) rate of growth is slower than the rate of price increase
c) rate of growth is faster than the rate of price increase
d) growth has no relation with the change in price
Answer »Answer: (b)
Stagflation is a condition of slow economic growth and relatively high unemployment.
It is accompanied by a rise in prices, or inflation. Stagflation occurs when the economy isn’t growing but prices are increasing, which is not a good situation for a country to be in.
Question : 4
Multi-purpose river valley projects are the “New temples of modern India”. The above statement is made by:
a) Mahatma Gandhi
b) Motilal Nehru
c) Rajiv Gandhi
d) Jawaharlal Nehru
Answer »Answer: (d)
Multi-purpose river valley projects were hailed as “Temples of Modern India” by Jawaharlal Nehru. They were intended and designed for integrated development in the area concerned.
Question : 5
Which of the following is equivalent to National income?
a) NDP at factor cost
b) NNP at factor cost
c) NNP at market price
d) GDP at market price
Answer »Answer: (b)
NNP at factor cost is equivalent to national income. Net National Product at factor cost is the aggregate payments made to the factors of production.
NNP at FC is the total incomes earned by all the factors of production in the form of wages, profits, rent, interest etc. plus net factor income from abroad.
Similarly, National income is the sum total of wages, rent, interest, and profit earned by the factors of production of a country in a year. Thus it is the aggregate values of goods and services rendered during a given period counted without duplication.
Question : 6
Lender of the Last Resort is :
a) IDBI
b) SBI
c) NABARD
d) RBI
Answer »Answer: (d)
The Reserve Bank of India (RBI) is known as the Lender of Last Resort. This is because when a commercial bank faces a financial crisis and fails to obtain funds from other sources, then the central bank provides them with financial assistance in the form of credit.
This role of the central bank saves the commercial bank from bankruptcy. Thus, the RBI plays the role of guarantor for commercial banks and maintains a sound banking system in the economy.
GET Introduction to Indian Economy PRACTICE TEST EXERCISES
introduction to indian economy section 1
introduction to indian economy section 2
introduction to indian economy section 3
introduction to indian economy section 4
introduction to indian economy section 5
introduction to indian economy section 6
introduction to indian economy section 7
introduction to indian economy section 8
introduction to indian economy section 9
introduction to indian economy section 10
introduction to indian economy section 11
introduction to indian economy section 12
introduction to indian economy section 13
introduction to indian economy section 14
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