introduction to indian economy section 1 MCQ Questions & Answers Detailed Explanation

Answer: (b)

After India gained independence, a formal model of planning was adopted, and accordingly the Planning Commission, reporting directly to the Prime Minister of India was established on 15 March 1950. Prime Minister Jawaharlal Nehru was the first chairman.

Answer: (a)

The Indian economy constitute of predominance of agriculture, low per capita income, massive unemployment.

Answer: (d)

Ways and means advances (WMA) is a mechanism used by the Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments.

These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of the RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts.

Answer: (b)

The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones.

The goal of an SEZ structure is to increase foreign direct investment by foreign investors.

Answer: (d)

Answer: (c)

Marginal Standing Facility (MSF) is the rate at which scheduled banks could borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities.

Banks can borrow funds through MSF during acute cash shortages (considerable shortfall of liquidity). This measure has been introduced by RBI to regulate short-term asset-liability mismatch more effectively and the borrowing is within Statutory liquidity requirements.

The Marginal Standing Facility (MSF) is pegged 100bps or 1 % above the Repo Rate.