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

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: (c)

India switched over to decimal currency in 1957 with the amendment of the Indian Coinage Act. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 ‘Paisa’ instead of 16 Annas.

Answer: (b)

The current account deficit is a measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. An increase in crude oil price and rise in services of import of oil, increase the current account deficit.

However, an increase in export software services will reduce the deficit.

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: (b)

Karnataka’s Chief Minister Siddaramaiah, in March 2016, made the announcement to abolish the tax on agricultural income while presenting the State Budget for 2016-17.

This in turn will provide relief to many tea and coffee companies besides thousands of individual coffee growers. Plantation companies had to pay a 35 per cent tax on their net income.

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.